According to data collected by Digi-Capital’s latest Global Games Investment Review, we could see total video game software revenue reach 100 billion dollars worldwide in just three years, with roughly 60 percent of that total believed to be coming from mobile and online games.
The report uses a compound growth rate based on historical data, and for the mobile and online sector, they have extrapolated a huge 24% growth rate using data for roughly the past three years. Consumer level sales aside, it is believed that much of this revenue growth will come from increasing mergers and acquisitions within the industry.
In the last year (from June 2013 to June 2014), of the $12.5 billion generated through mergers and acquisitions, about a third of those were attributed to mobile gaming companies, as in many cases larger mobile firms have began buying out potential competition. Another third of these mergers and acquisitions were attributed to the recent uprising of the free to play MMO genre, further reinforcing the prediction of mobile and online games driving industry growth in the near future. Looking only at the six months from 2014, it is seen that more revenue has been produced from video game industry mergers and acquisitions ($6.6 billion) than any other calendar year before it, with six months still left to go.
Aside from the industry simply being attractive to new entrants and the aforementioned preemptive acquisitions mobile companies are making in order to limit future competition, the report cites increased globalization, as more video game companies are wanting to expand their presence around the world, as a potential catalyst for revenue growth. Certain waning initial public offerings for developing tech and video game companies have also began coming full circle, as their unimpressive debuts have in turn made investing in them now at a lower current price seem more reasonable.
Hopefully these predictions aren’t too far off, as it would be amazing to see the industry we all love grow to such astounding heights, regardless of how we may feel about the mobile and online sectors that seem to be driving most of the growth.