Why the Gaming Industry is Poised for Near-Term Growth

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Behind the scenes at Goldman Sachs, thought-provoking insights are bubbling up each day. This space is for a few nuggets we think are worth sharing. From macroeconomics to the genome medicine revolution to the rise of digital gaming, these stories from around 200 West show you how top-level views can impact your life (and maybe even shape the way you think about money).

Video games have surged to become one of the fastest-growing forms of entertainment globally. And if you’ve ever fired up a game on your phone to help pass the time on a plodding commute, you can say you’ve contributed to the trend. According to Goldman Sachs Research’s Masaru Sugiyama, the rise in mobile gaming has fueled recent industry expansion and should continue to pull in players and cash — and a few years down the road, there are a number of other growth drivers on the horizon that can help gaming reach a whole new level.

Below are some quick highlights from what Sugiyama had to share in The Long & Short of It video series.

Mobile is transformative

Billions of people have mobile connectivity, in contrast to just hundreds of millions of gaming consoles players are scooping up. Sugiyama says this makes mobile gaming a huge growth opportunity asd well as the chance to create new business models.

5G can give mobile gaming the speed other platforms don’t have

Sugiyama says mobile gaming, which represents about 50% of the gaming market, will continue to expand. Mobile infrastructure, specifically the 5G networks the telecom industry is building, is behind some of his optimism.

“5G could actually change, first of all, the access landscape at home for many of these gamers or potential gamers. So even if you don’t have a fast internet connection at home you might be able to access these immersive games through mobile,” he says.

Independence from the disc

Part and parcel of the shift to mobile is a shift away from dependence on physical disc sales. Many games are now free to play, and business models are changing from one-time disc purchases to subscriptions and in-game purchasing. As an example, Sugiyama points to Fortnite, the free game that’s attracted over 250 million users.

Gaming is a big deal, even for people who don’t play

It won’t just be gamers themselves propelling the industry higher. Viewing of top video gamers’ play by hundreds of millions of ardent fans is also creating business opportunities in the gaming industry that never existed before. Sugiyama’s team expects the eSports industry could generate nearly $3 billion in revenue by 2022. “At the end of the day, video games are enjoyed by almost as many people as by people who enjoy watching sports,” he says.  

Gaming predictions for 2022

  • Global gaming market is expected to reach $200 billion 
  • eSports revenue could reach nearly $3 billion
  • Virtual reality and augmented reality could represent 5% of the gaming market 

This article is for informational purposes only and is not a substitute for individualized professional advice. Articles on this site were commissioned and approved by Marcus by Goldman Sachs®, but may not reflect the institutional opinions of The Goldman Sachs Group, Inc., Goldman Sachs Bank USA or any of their affiliates, subsidiaries or divisions.