We have a new Year in Review from Nielsen company SuperData. The report covers not only digital games but also interactive media such as gaming video content and XR (extended reality: incl. VR, AR, MR).
The SuperData Year in Review is primarily broken down into Digital Games, Gaming Video Content (more about this here) and XR. So, we’ll summarise each section in order.
Digital Games
SuperData reports that digital games revenue increased 11% year-on-year from 2017 to 2018 earning a total US$109.8 billion.
For reference, SuperData categorises Digital Games into the following:
- Mobile
- Free-to-play PC
- Social
- Premium PC
- Pay-to-play PC
- Premium console
- Free-to-play console
Of these categories, the one that earned the most was mobile gaming. Of the US$109.8 billion earned by all digital games in 2018, US$61.3 billion (55.83%) came from mobile games.
And, mobile games make up a large portion of the total free-to-play category as well. Over 2018, free-to-play games earned US$80.2 billion with US$57 billion (71%) coming from mobile games across Asia, North America and Europe. In Asia, free-to-play mobile earned US$41.5 billion which makes up 73% of the mobile market across all 3 regions mentioned before.
SuperData reports that Fortnite greatly increased the visibility of free-to-play console games whose revenue jumped to 458% year-on-year. In addition to this, Fortnite was the top free-to-play game by revenue in 2018 earning US$2.4 billion (The Top 10 includes preliminary December data, notes SuperData).
Gaming Video Content
Across YouTube, Twitch and Other platforms (not specified by the report), gaming video content earned US$5.2 billion in revenue. As expected, the platform that earned the highest revenue was Twitch with US$1.6 billion. Twitch achieved this despite having a smaller audience than YouTube (Twitch’s 183 million against YouTube’s 594 million). Comparatively, YouTube earned US$1.2 billion which is only 25% less than Twitch’s revenue.
XR and immersive tech
In 2018, VR, AR/MR and cameras/gear together earned US$6.6 billion. By 2019, this is expected to almost double with revenue of US$11.5 billion (74.24% expected year-on-year).
SuperData notes that the main driver for AR and MR during 2018 were social media apps. In particular, Chinese app TikTok helped boost AR users. According to SuperData, in the US, the apps that also helped boost AR uptake were TikTok, Snapchat and Instagram.
Location-based VR attractions are expected to become even more popular in 2019. In 2018, the market grew 37% to US$413 million.
Of course, while gaming is one of the first things that come to mind when considering XR, it’s not the only use case. SuperData reports that the biggest driver of enterprise VR adoption is training among companies that use VR in their businesses. VR training is extending into areas like customer service, according to SuperData. They expect enterprise clients to make up 85% of AR/MR headsets sold in 2019 based on this driver.
Insights
The prominence of mobile games in the overall gaming market comes as no surprise. Mobile is one of the most popular gaming platforms globally. It’s primarily driven by the Asia-Pacific region where Asian countries are more mobile-first societies. The mobile market is the most accessible in terms of cost of entry for users and the concept that more people are likely to own a smartphone than a particular gaming PC or console.
Despite its name, free-to-play games are generating much more revenue than non-free-to-play counterparts. In SuperData’s report, of the Top 10 free-to-play games by revenue in 2018, only number 10 (Clash Royale by Supercell/Tencent) avoids breaking the US$1 billion revenue mark. It should be noted that the Top 10 list includes preliminary data from December.
Looking closer at the free-to-play Top 10, 5 of the games are mobile games (arguably 6 if the #1 – Fortnite includes mobile revenue). In 4th, 6th, 8th, 9th and 10th place are Pokemon GO, Honour of Kings/Arena of Valor, Candy Crush Saga, Monster Strike and Clash Royale respectively. The prominence of mobile games in the Top 10 suggests that mobile free-to-play is a much larger gaming market than most people may expect.
We’ve shared previous data and insights on the mobile market here:
- How long until mobile esports becomes a thing in ANZ?
- Casual vs hardcore: Mobile gamers are gamers too
