Console resurgence puts US ahead of China in global gaming revenue
Currently, China has the largest share of the mobile gaming market in the world. It has outpaced every other country to meet the demand of its app-hungry, fast-fingered players. It is true that gamers in China have a huge appetite for mobile, tackling popular RPGs and puzzlers to kill time – be they on their way to work on the Metro or relaxing at home.
But what about the console market? Well, according to a new report by analytics and market research firm Newzoo, that is a different story. That is where China has lagged behind and the U.S. is accelerating. Among many insightful findings in the summary of their Global Games Market Report 2019, it indicates that the US has finally overtaken China in terms of gaming revenue overall.
The conventional viewpoint in the gaming industry has long been that China and Asia are the major markets to conquer and the ones that developers should focus on first. You only have to look at recent industry headlines to see that publishers are trying to appeal to Chinese mobile-first tastes and preferences.
So what has caused the reversal in expectations? Apparently, the answer is the resurgence and current strength of consoles. According to the latest figures, console gaming with 32 percent of the share of the overall market – and dominated by players such as Sony, Microsoft and Nintendo – has grown consistently by 13.4 percent year-on-year.
The consensus is that mobile is dominating the global gaming market, and that China has the largest enthusiasm for that niche – therefore China has the largest share by default. Mobile gaming has a dominant 36% share of the global market. But in comparison with console gaming, it has grown at a slower pace, just 11.6 percent year-on-year.
So it seems there is stronger momentum in the console domain at the moment. What could be the root cause? Maybe it’s the curious example of the Nintendo Switch, which is still identified as a "console" even though it can be played in mobile, too, and many do use it in this way.
With a highly portable option for quality gaming, the Switch could have taken over a sizeable chunk of the mobile market share, especially with more famous 3rd-party publishers porting their best games to the platform. It certainly appears that console gaming is establishing new growth in users.
Whatever the report says, it is worth taking the country comparison with a dose of scepticism. The U.S. may be outpacing China, but the North American region as a whole is still well behind the totality of Asia. That takes a huge 47 percent slice of global revenue compared to the U.S. and Canada’s 26 percent.
China's Tencent is still the number one public gaming company in the world in terms of actual revenue, but the growth in 2018 dropped sharply from 51 percent to just 9 percent year on year from 2017-2018. This can be mostly attributed to China's freeze in new licenses. It has allowed Sony and Microsoft to claim more ground, growing 41 percent and 32 percent apiece.
In recent years, the gaming demographic has changed, too, with categories of players falling into categories such as Popcorn Gamers, Cloud Gamers and Time Fillers. Popcorn Gamers are e-sports and streaming fans that may play less than they watch. Meanwhile, Cloud Gamers are players who still want a top-quality experience but gravitate towards free to play. They’re less likely to spend lots of cash on hardware or physical gaming.
Lastly, Time Fillers are just like the casual audience of old, but specifically with the rise of mobile gaming these players will normally get by on a quick session of Candy Crush on their commute and think nothing of gaming the rest of the time.
So what, if anything, does this mean for gamers going forward? It will almost certainly raise some corporate eyebrows to see that neither mobile gaming nor China are continuing to take off in the same way as console gaming in the US, or gaming in the States as a whole, respectively.
So, as we leap forward into the next generation, we might see a renewed focus on providing substantial experiences for the traditional console sector. That might be the case even if those games are delivered via a cloud platform rather than physically.
Although the methodology is sound, all of this is just an educated opinion of the state of the industry, and this is the best we can expect. What the future will bring in the future of gaming and digital entertainment as a whole, only time will tell.