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The Growing Value of the Games Industry

August 31, 2011

I was looking for an article I’d read on the interweb when I came across this, from 3 years ago:

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. …  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.

So how did the predictions do? Well they fell far short. We’re at $105 billion and its only 2011!

Paul Heydon of independent banking firm Avista Partners, an investment banker working in the game sector since 1999, has come up with his best guess for the approximate value of the videogame business across the entire world. Speaking at the UK’s Edinburgh Interactive Festival 2011 this week, Heydon puts videogaming at about $105 billion worldwide. 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.

So why is it so out? My guess is that it did not account for the huge rise in both social gaming and smart-phone gaming, which frankly took lots of people by surprise. Which is why making predictions for 10 years hence, is fun, but never going to pan out.

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