Although online gaming has been on the rise for quite some time, 2020 and 2021 have proved to be milestone years in terms of the growth of the industry as a whole.
Much of this was due to the global pandemic that gripped the world for two years and forced us to stay at home for more time than we were comfortable with. In these circumstances, the global revenues of game developers exploded as online gaming became an increasingly popular way of socializing while stay at home orders were in effect.
This led to the global games market generating revenues of an estimated $175.8bn, with industry analysts expecting this figure to rise to well over $200bn by the end of 2023.
Based on these figures alone, it is clear that the online gaming industry looks set to experience significant market growth in the coming years. More and more players are also expected to turn to video games, online games and mobile games to socialize and spend their free time.
But beyond the raw data, what will some of the technological innovations and consumer trends driving this market growth be?
Online ecosystems and the metaverse
One trend that looks set to be an important force in 2023 and beyond is the rise of the metaverse.
Ever since Facebook popularized this concept and term with their name change to ‘Meta’, the online gaming industry has been buzzing with talk of the metaverse. This is despite the fact that it is still very much early days in terms of the development cycle and few use cases have been fully fleshed out.
Nevertheless, this new frontier for our online lives looks set to be a defining feature of online gaming in 2023 and beyond.
Here we can expect to see companies invest more and more effort into developing customer loyalty programs that entice users into spending more time in their online metaverse space. In this context, everyone from online casinos to traditional online gaming companies will be competing for your attention in new and pervasive ways.
The future is mobile
Interestingly, of the $175.8bn in global revenues generated by gaming companies in 2021, more than half of this figure came from mobile gaming. This makes it by far the biggest segment of the global gaming market and signals what the future of the gaming industry might look like.
In 2020 alone, mobile games accounted for roughly $77.2bn in revenue. This is in addition to an increase of 12.5% in the total number of players, which currently stands at around 2.5 billion globally.
With these figures in mind, one of the defining trends of online gaming in 2023 and beyond, will be the importance of mobile gaming.
Mobile games will be played on a number of different devices, although we can expect to see mobile phones increasingly being used for online gaming. This will signal a continued move away from dedicated mobile gaming devices by companies such as Nintendo and more recently, Steam.
The iGaming industry in particular has made a dedicated effort to increase support for mobile gaming. The easy pick-up-and-play nature of the games makes them a natural choice for a medium like smart phones. In fact, the main issue these platforms have isn’t getting people to choose a mobile-oriented approach, it’s getting you to choose to spend your spare 5 minutes with them.
They compete with social networks, push notifications, messaging services, weather checks, streaming, and almost everything else you can do when you pick up your phone. One way of combating this is loyalty schemes that reward you for your dedication to a particular platform – you can find an example of the loyalty scheme of a market leader here. Users are more likely to come back if they feel they’re getting rewarded with something extra.
With pocket space at a premium these days, devices that double up as a mobile phone and gaming platform will be preferred by users, particularly given that recent innovations mean the technological gap between the two is diminishing. With the rollout of 5G picking up speed, a true online gaming experience will be possible without the need for a high-speed Wi-Fi connection.
Cloud streaming devices
Another important hardware trend that looks set to define the online gaming industry in 2023 and beyond, is cloud service providers.
Cloud gaming services deliver content from the cloud to a gaming console, with players essentially streaming compressed videos straight from servers. Interactions happen in a fraction of a second, with the level of responsiveness essentially the same as if you were playing from a local copy of the game.
Companies such as Microsoft, Steam, Amazon and Google have been at the forefront of this move towards cloud streaming services for some time, although they have been held back by the development of mobile internet technology. As services such as 5G mobile internet and fiber broadband become more widespread, however, the technological limitations will slowly begin to diminish.
It is, for this reason, we are seeing companies pour more and more money into developing these services, with companies such as Netflix long being rumored to announce their entry into this space.
Cloud streaming could revolutionize the industry as it will do away with the need for game development lifecycles to be tied to hardware cycles. Video game developers will no longer be limited by aging technology if hardware manufacturers have been slow to release the next generation of consoles. For online gaming and esports fans in particular, this means that the costs of acquiring a console will be less prohibitive.
This is a paid guest post.