If gaming seems to be all the rage these days, just wait until five years from now. PricewaterhouseCoopers has published its comprehensive Global Entertainment and Media Outlook report for 2008. Data from the report indicates that the future of gaming is, unequivocally, a bright one.
The report offers in-depth global analysis and five-year growth projections for the year 2008 through to 2012. As Reuters points out, headlining the report is a projected compound annual growth rate for the gaming industry of 10.3 percent, which will easily top growth in the majority of other entertainment sectors. Global industry sales as a whole will rise from $41.9 billion last year to $68.4 billion in 2012. This falls in line with previous forecasts, including PWC's own from last year that predicted gaming would outpace growth from other entertainment sectors like movies and music.
Console games will continue to lead the way in terms of sales, with an expected growth of 6.9 percent from $24.9 billion in 2007 to $34.7 billion in 2012. In the US alone, the report predicts an increase at a compound annual rate of 6.3 percent, with sales up to $11.7 billion in 2012 from $8.6 billion in 2007. Following suit, online games will also see massive growth. Online games, which generated $6.6 billion in 2007, will jump to $14.4 billion in 2012.
Data source: PriceWaterhouseCooper
Despite comments from industry insiders who adamantly defend the PC market, the study forecasts a decline in PC gaming through to 2012. The sector's sales are expected to drop from $3.8 billion last year to $3.6 billion in 2012. That 1.2 percent drop, though small, isn't great news for the PC market. This will likely come as a result of the general downturn in the number of quality PC game releases, with just a few big titles each year winning the hearts and wallets of PC gamers at large. One would expect that platforms like Steam and GameTap will continue to enjoy growth, however.
Perhaps unsurprisingly, the recent influx in video game advertising ventures—most notably the acquisition of Massive by Microsoft and Sony's recent deal with IGA Worldwide—will lead to a 16.7 percent annual growth rate for in-game advertising, as profits are posited to rise from $1 billion in 2007 to $2.3 billion in 2012. It's likely that more companies will begin to take the plunge, too, as profits continue to soar. In-game advertising is here to stay, whether gamers like it or not.
Riding on the ever-increasing wave of success, the oft-ignored mobile gaming market will see the most substantial increases of all. With handheld devices at large hosting more and better games, predictions peg the mobile gaming sector to grow a staggering 19 percent, sales rising from $5.6 billion last year to $13.5 billion in 2012. Canada will apparently benefit the most from this boom following the introduction of more Edge and 3G phones to the country, with a compound annual growth rate of 20.2 percent, bringing profits for the sector up to $346 million in 2012.
With more and more consumers picking up a controller these days, the video game industry shows no signs of slowing down. The report makes it clear that gaming is clearly going to outpace almost every other form of entertainment, movies and music included. That could mean that movie and music revenues continue to fall as game revenues rise. These forms of entertainment are all competing for the same wallets.
For the gaming industry, growth is proceeding at a rapid rate, and it's not hard to look past these figures for 2012 and see an even brighter future as the industry moves toward the eighth generation. For that to happen, though, game companies will be pressed harder and harder to come up with new ideas, which could make for an uphill battle. After all, the last time industry forecasts looked this rosy, back in 1983, the whole industry crashed.
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