Online Gaming: The Rise of a Multi-Billion Dollar Industry

Online Gaming: The Rise of a Multi-Billion Dollar Industry

From tabletops to virtual reality, how we play games is changing with the times.

In just a few short decades, the world of online gaming has exploded in popularity. Estimated to reach $196 billion in revenue by 2022, it is now considered to be one of the fastest growing industries on the planet.

The infographic above explores the humble beginnings of the online gaming market and dives into the technological possibilities driving its future.

The Birth of Online Gaming

Although video game prototypes were created by scientists as early as the 1950s, the very first gaming console was not introduced to consumers until the ‘70s. Subsequently, use of online games began to proliferate in the ‘90s as a result of widespread internet adoption.

• 1990s: Online gaming rapidly gains popularity due to the increasing availability of the internet
• 2003: Digital storefront Steam launches, allowing gamers to buy and review games online
• 2004: World of Warcraft launches, the first massively multiplayer online (MMO) to eclipse more than 10 million active subscriptions
• 2007: Online gaming starts shifting to mobile
• 2009: Minecraft launches and becomes one of the best selling video games in history with 176 million copies sold
• 2009: Apple announces In-app Purchase feature for iPhone apps
• 2015: 1.5 billion gamers around the world
• 2016: Augmented reality game Pokémon Go is launched, generating the most revenue grossed by any mobile game in its first month.
• 2019: Google releases Stadia, a cloud gaming service that allows gamers to play without a console

It is clear that technological innovation plays a huge role in fueling the evolution of online gaming, but there are also several other factors at play.

The Components of Online Gaming

In the world of gaming, there is often confusion between commonly used terms such as “online gaming” and “esports”—when in fact esports is just one segment that sits within the enormous online gaming ecosystem:

• Distributors and Retailers: Platforms that distribute and sell games
• Streaming Services: Services that allow users to livestream games
• Hardware Developers: Companies that build the electronic infrastructure required to play games
• Gaming Arenas: Venues that host gaming events
• Esports: Organized, multiplayer video game competitions, typically between professional players
• Software Developers: Develop applications that allow users to do specific tasks
• Game Publishers: Companies that finance and distribute games
• Game Developers: Studios that develop games

This ecosystem creates dozens of revenue streams for the industry as a whole. For every one of these channels, the shift to mobile gaming presents significant opportunities for growth.

Mobile: The Future of Gaming

Mobile is the largest gaming platform, producing $68.5 billion in revenue in 2019—45% of the total market that also includes PC and tablet gaming.

Although still a relatively new segment of the industry, mobile gaming has developed at an astonishing rate, with 2.4 billion people playing games on mobile in 2019. Part of mobile’s breakneck growth can be attributed to an innovative and seamless user experience which relies on engaging features such as in-app purchases and loyalty rewards.

With the 5G era quickly descending upon us, these pocket-sized game consoles could transform online gaming, and make the industry even more exciting.

Towards a New Age of Entertainment

As the number of players continues to grow, it is clear that the technological possibilities of online gaming are endless. Some are already beginning to take shape:

Virtual Reality

With industry leaders such as Oculus and Valve announcing cheaper headset options, blurring the lines between fantasy and reality is becoming more accessible for mass markets, and the pace could pick up further in 2020.

Cloud Gaming

Cloud gaming takes advantage of faster, more reliable internet connections by giving gamers the ability to stream games rather than playing on a console.

Real-time Personalization

In the future, games could automatically generate game content that is customized to fit each player’s personality and playstyle, based on their player data.

As these technologies develop, they alter the way users experience games, and provide new opportunities for brands and advertisers to tap into enhanced viewer engagement.

Many industry players will thrive in this new environment, while others will fall by the wayside. Who will emerge victorious, and lead us into the future of entertainment?