Analysis of the Video Game Industry In 2022

If you're curious about the state of the video game industry in 2022, this analysis will give you an idea of what to expect. We'll look at the market's growth stages, shakeout stages, M&A activity, supply constraints, and more.

Global Player Numbers Will Reach New Heights In 2022

Video games have been a popular pastime for decades. The advent of the internet has made them more accessible to many consumers. This has increased the demand for games and helped the gaming industry grow into a multi-billion dollar industry. The gaming industry is highly fragmented, with numerous companies competing for market share. However, a few key players have emerged as leaders in the industry. Some of these include Sony, Microsoft, and Nintendo. 

These companies are constantly innovating and releasing new products. They also continually strive to improve the overall experience for users. One of the most significant trends in the video game industry is the growing popularity of mobile games. Mobile games are becoming more popular due to the advancement of internet connectivity and better cell phone infrastructure. This will drive the growth of the market over the next few years.

Mobile Gaming Generates More Revenue Than Pcs and Consoles Combined

The mobile gaming market has emerged as the leading entertainment industry segment, overtaking PC and consoles in revenue. Mobile games are expected to account for over half of the global gaming market by 2021. This is because of the rise of the smartphone market over the past few years. According to a New zoo report, the mobile gaming industry is expected to bring in 103.5 billion dollars in 2022. This is 53% more than what PC and consoles bring in. There are over two billion gamers in the world today. Of those, more than half play on mobile devices.

Supply Constraints

Supply constraints in the video game industry are nothing new. But they are still a reality and are bound to increase in intensity during the upcoming holiday shopping season. In the coming months, companies will need to reinforce their inventories and use their supply chain better. And that's not all. It's no secret that games are growing in popularity with younger generations. This is good news for players and publishers, but it also means more competition. Despite the tumultuous times, the gaming industry is still in good hands. However, companies can still afford to throw the baby out with bath water. Among the latest challenges are labour shortages and supply chain disruptions, which hurt profitability.

The Free-To-Play Model Has Demonstrated Success In Building Scale

A free-play model has become a booming business in the video game industry. It resembles a burgeoning startup with a major corporation's financial and technological backing. These companies have developed a business model allowing players to use digital goods in exchange for money. Typically, these games require a certain level of server-side security to prevent piracy. Several players have been in the industry for decades. Some of the major players include Sony, Nintendo, and Activision Blizard. While the gaming market is fragmented, the leading companies continue to innovate and push the boundaries. One of the most successful free-to-play games is Fortnite. The company has become the poster child for leveraging multiple identity systems to create a wildly popular multiplayer game. The game generated over $5 billion in revenues in its first year.

M&A Activity

The gaming industry is entering a new era of accelerated M&A activity. The largest video game deals of the past three years are underway. A new report from Drake Star Partners offers a comprehensive analysis of the games industry's dealmaking. The gaming industry has seen $95 billion in M&A transactions this year. 

Historically, the first quarter of the year has been the most active. But in the year's second half, the deals volume increased by more than 60 per cent. Microsoft's proposed takeover of Activision-Blizard is the biggest deal in video game history. Although the agreement is still under regulatory review, it is expected to close in the first half of next year. It also faces anti-competitive claims from rivals.

Growth Stages and Shakeout Stages

The video game industry has a bright future, and the past few years have seen significant growth. However, the sector is undergoing several transitions. For example, game publishers are shifting from the traditional acquisition model to in-house development, and the industry is beginning to see increased competition from various new players. While the gaming industry is accelerating, many companies need help to keep up with the competition. The industry is also undergoing several technological advances. One of the most notable is the reduced latency, which allows for the creation of larger virtual worlds.

Author Bio

Tobin John is a research-based content writer for Research Prospect. He provides ideas for dissertation topics, dissertation ideas and many more services to students of all levels, and their experts are all UK-qualified.  Mr Tobin holds a PhD degree in mass communication. He loves to express his views on various issues, including education, technology, and more.