The world games content and services market will decline in 2022 to US$188 billion (-1.2%), the latest outlook from Ampere Analysis forecasts. Following a very strong market performance in 2021 (+5%, $191 billion), the sector landscape has become increasingly unsettled during the first six months of 2022.
While the global pandemic has raged, the games market has expanded hugely adding 26% to its scale and US$39 billion in spending from 2019 to 2021. “Now that many countries have returned to more normality, it is inevitable that consumer attention on gaming will in some cases become more diluted, especially in mature markets,” noted Piers Harding Rolls, Research Director at Ampere Analysis and the author of the report.
The researcher remarked that games sales are not immune to macroeconomic turbulence. In fact, as the world progress through a period of heavy inflation, with an increasing cost-of-living squeeze, and a higher potential for a recession, it is inevitable that the games market will be negatively impacted in certain areas. Indeed, the fact that the games sector is now as broad as it is suggests that there are likely to be more cases where a cost-of- living squeeze will impact consumption compared to 2008 and 2009, when the last major global recession took hold.
“The idea that the games market is 'recession proof' is a fallacy. However, games remain very good value for money and if consumers dial back on other discretionary spending but are at home more, the sector will be relatively well insulated from some of the worst effects of a global slowdown. Ampere currently expects the global market to spring back in 2023 as mature markets stabilize and growth markets continue the adoption of gaming,” Piers Harding Rolls added.
● MOBILE GAMING SET FOR A DECLINE
Beyond the macroeconomic and post-pandemic attention factors, each device category is also experiencing other factors that are impacting performance. Ampere’s current year-on-year outlook forecasts the mobile gaming segment to decline by 1.3%. PC gaming is also expected to decline, by 3%. Console gaming performance is forecast to be flat, while the cloud segment – which includes pure streaming subscription services only – is expected to grow strongly from a very small base.
The biggest segment of the market, mobile gaming, is facing a significant challenge following changes in mobile platform privacy settings, which have turned on its head the ability to target specific cohorts and track advertising performance. According to Ampere, this is undermining user acquisition, and the industry will need time to effectively rebuild tactics to overcome these changes.
“After two years of huge expansion, the games market is poised to hand back a bit of that growth in 2022 as multiple factors combine to undermine performance. Even so, the year will end well ahead of pre-pandemic performance, and the outlook for the sector as a whole remains positive, with growth forecast to return in 2023,” Piers Harding Rolls concluded.
After two years of huge expansion, the games market is poised to hand back a bit of that growth in 2022 as multiple factors combine to undermine performance” Piers Harding Rolls Research Director at Ampere Analysis