The online gaming industry is set to hit $152.6 billion by 2030, growing at a robust annual rate of 9.1% between 2024 and 2030. The surge is largely driven by increasing investments in online games and the expanding use of smartphones and tablets.
Reliable high-speed internet and strong network connectivity are also key drivers behind the growing demand for online gaming services.
Additionally, ongoing upgrades in network technology and advancements in augmented reality (AR), virtual reality (VR), and extended reality (XR) are expected to create major opportunities for growth in the iGaming sector during this period.
Mobile gaming is experiencing a major boost, largely thanks to the widespread adoption of smartphones highlighting the growing importance of mobile platforms, which offers unparalleled convenience and accessibility.
As smartphones become a staple in everyday life, more players are turning to mobile games for their entertainment, creating a diverse and expanding audience.
Mobile gaming has therefore emerged as a leading segment in the online gaming market, reshaping industry trends and offering exciting prospects for developers and other stakeholders.
Meanwhile, many gaming companies are turning to in-game purchases and microtransactions as key sources of revenue. By offering players options like virtual goods, skins, and extra content for a fee, these companies are tapping into the demand for personalized and enhanced gaming experiences.
The strategy not only boosts their profits but also helps keep players engaged and coming back for more. By building dynamic in-game economies, these companies allow players to tailor their experiences, which in turn supports the ongoing expansion of the online gaming market.
The latest data highlights these trends and provides insights into the evolving landscape of online gaming.
North America Remains a Market Leader: North America continues to dominate the online gaming market, holding more than 42% of the global share.
The leadership position is supported by significant investments in technology, extensive internet usage, and favorable government policies that bolster the sector. The region’s well-established infrastructure and large consumer base play pivotal roles in sustaining its leading market position.
Smartphone Gaming on the Rise: The smartphone online gaming market is projected to grow at a robust Compound Annual Growth Rate (CAGR) of 6.5% from 2024 to 2030.
The growth is driven by the widespread adoption of smartphones and the increasing availability of high-speed internet. As mobile technology advances, smartphones are becoming an increasingly popular platform for gaming, offering convenience and accessibility that appeal to a broad audience.
Virtual Reality Shows Rapid Growth: Virtual reality (VR) is emerging as one of the fastest-growing segments in the online gaming industry. With a forecasted high CAGR, VR is poised to revolutionise gaming experiences through immersive technology.
Although many VR input devices are currently in prototype stages, significant investments in Research & Development (R&D) are underway. Companies are working to develop consumer-ready VR systems that will integrate with consoles, desktops, and smartphones, expanding the technology’s reach and potential.
Market Segmentation and Trends: The online gaming market is characterized by a diverse range of segments. It encompasses various types such as smartphones, tablets, gaming consoles, handheld consoles, and PCs, each catering to different gaming preferences.
The market also serves both male and female gamers across different age groups, from those under 18 to individuals aged 50 and above.
Game genres are varied, with popular categories including First Person Shooter (FPS), Sports, Battle Royale, Real-Time Strategy (RTS), Role Playing Games (RPG), Racing, and many more.
Players have choices between single-player, multiplayer, and massively multiplayer online (MMO) experiences, and games are distributed through various channels such as browser-based platforms, apps, and preloaded/offline purchases.
Monetization strategies for online games are equally diverse, ranging from free-to-play and freemium models to pay-to-play, subscription services, and one-time purchases. This variety reflects the different ways in which game developers and publishers approach revenue generation.
Top Companies in Online Gaming: The online gaming sector is shaped by several major players, including Ubisoft, Activision Blizzard, Zynga Inc., Microsoft, Betsson AB, Konami, Sega, Sony Corp., Tencent, and Wargaming.
The game tech companies are at the forefront of innovation in the industry, continually developing new titles, technologies, and business models to meet the evolving demands of gamers.
The smartphone online gaming market is projected to grow at a compound annual growth rate (CAGR) of 4.5% between 2024 and 2030. The expansion is fueled by the widespread adoption of smartphones and internet connectivity globally, which is accelerating the market’s growth.
Online mobile games are gaining popularity, with players being drawn to additional premium content and functionalities. Popular titles such as Fortnite and PUBG continue to drive the market and influence the online gaming landscape.
As these games gain traction, gaming companies are heavily investing in the development of Battle Royale and other online mobile games.
In 2022, esports tournaments had a combined prize pool of $3.2 million, and Web3 gaming companies in India secured $620.5 million through 32 deals. These investments are fostering innovation in smartphone games and are expected to propel market growth in the forecast period.
In terms of game genres, Battle Royale is experiencing the highest CAGR. Advances in game mechanics and features are driving growth in this genre.
Notable Battle Royale games such as PUBG Mobile, Garena Free Fire, Fortnite, and Apex Legends are showing strong performance in their respective regions. Honor of Kings emerged as a top performer, generating over $2.2 billion in revenue for the year.
Major companies like Tencent and Ubisoft are heavily investing in this genre, and numerous leading first-person shooters have recently introduced Battle Royale modes, including Call of Duty and Counter-Strike. These developments are expected to drive market growth through 2030.
Geographically, North America led the online gaming market in 2023, holding over 42% of the market share. The dominance is attributed to high smartphone and internet usage, with internet penetration in the region reaching 93% and adults spending an average of 3 hours and 28 minutes on digital media.
The increasing number of 5G connections is further anticipated to drive market growth in North America over the forecast period.
Several factors are driving the growth of the online gaming market. Governments worldwide are recognizing the potential of online games and are offering incentives to gaming studios to develop and retain talent locally, while also attracting international talent.
For example, Sweden has established Sweden Game Arena to support game development with government-funded resources. Similarly, countries like the U.S. and the U.K. are providing significant investments to support the industry.
Additionally, the rise of artificial intelligence (AI) in online gaming is contributing to market growth. AI is being utilized to prevent cheating, enhance gameplay, and adapt to player behavior, further boosting the market.
However, the market faces challenges such as increasing online fraud, regulatory compliance issues, and profitability pressures.
Fraudulent activities can result in substantial financial losses, and varying legal standards across regions complicate regulatory compliance.
Intense competition is among established companies, startups, and independent developers is driving the need for substantial investments in product development and technology, which could impact profitability and market growth.
The online gaming market is characterized by a dynamic landscape with numerous players adopting strategies such as technology launches, acquisitions, partnerships, and R&D activities.
In 2023, the market was fragmented, with top companies including Ubisoft Entertainment, Blizzard Entertainment, Zynga Inc., Microsoft, Konami, Sega, Sony, Tencent, Wargaming, and Electronic Arts.
Notable recent developments include Microsoft’s acquisition of Activision Blizzard in October 2023 for $69 billion, marking the largest deal in the video game industry’s history. The acquisition is expected to enhance Microsoft’s position in the market.
Additionally, in July 2022, Sony Interactive Entertainment acquired Haven Entertainment Studios Inc. to strengthen its gaming studio portfolio and develop innovative gaming experiences.
Online Gambing Market Conclusion
The online gaming market is poised for significant growth through 2030, driven by increased smartphone and internet adoption, the rising popularity of online games, and substantial investments in game development and technology.
