How Much is the Video Game Industry Worth in 2023 and its Future

With the gaming industry growing each day at a staggering rate, many are left wondering, how much is this industry really worth? Does it count in hundreds, millions, or billions of dollars per week, month, or year? Today we will explore the topic of the video game industry’s net gains and overall worth according to the latest data available to the general public.

Video games have been around for quite some time now. Developed in the late 50s by a physicist called William Higinbotham, it is believed that this man is responsible for laying the groundwork for what will become one of the most valued industries in the 21st Century.

That said, it is worth noting that his first video game was called “Tennis for Two” and it featured a very simplistic form of a two-player video game with moving graphics using a device called the Oscillograph.

Since then, we have indeed come a very long way in terms of graphics, in-game mechanics, 3D modeling, and much, much more. Games nowadays feature unbelievably realistic graphics, captivating stories, and fluid mechanics making them one of the most unique experiences that bring joy to millions of people worldwide.

Video Gaming Industry Statistics

• The estimated market value of the video game industry in 2023 in the US alone is $249.60 billion ^[1].
• The industry is projected to grow at an annual rate of 9.83% between 2023 and 2027, resulting in a projected market volume of $363.20 billion.
• By 2027, the number of users in the video game market is expected to reach 3.0 billion.
• The mobile gaming segment is expected to account for approximately 50% of the total video game industry revenue in 2023.
• Esports (competitive video gaming) continues to thrive, with global esports revenue projected to reach $1.08 billion in 2023. This includes revenue from sponsorships, advertising, media rights, and merchandise.
• Cloud gaming services are gaining traction. By 2023, the cloud gaming market is expected to be worth $6.9 billion, driven by platforms like Google Stadia, NVIDIA GeForce Now, and Xbox Cloud Gaming (formerly Project xCloud).
• The VR gaming market is expanding, with an estimated worth of $4.7 billion in 2023. Innovations in VR hardware and content are driving this growth.
• The Asia-Pacific region remains the largest market for video games, contributing significantly to the industry’s overall worth. China, Japan, and South Korea are key players in this region.
• As of 2023, the number of employees in the video gaming industry in the United States has reached over 268,000 ^[2]. Additionally, the video games software development industry employed an estimated 17,400 individuals in the same year ^[3]. Furthermore, there are 47,993 enterprises in the Video Games industry in the U.S., which reflects a 10.98% increase from 2022 ^[4]

With their widespread popularity and growing numbers, a rational question comes to mind when discussing the video game industry. Namely, how much is it actually worth?

According to the most recent data by Statista, the video game industry is valued at a mind-blowing 347 billion US dollars for the year 2022.^[5] That of which, 248 billion are generated from the mobile game industry alone. And this goes without taking into account the global revenue generated by the said industry which is valued at approx. 396.2 billion US dollars.

Source: Statista

Some estimates believe that the video game industry revenue will continue to grow exponentially, reaching the mind-bending number of 626.78 billion US dollars by the year 2028.

“The Big Three”

The currently believed paradigm, supported by hard evidence such as annual revenues, states that the current leaders in the video game industry are Nintendo, Sony, and Microsoft. These companies not only develop and produce video games but also manufacture hardware components, consoles of their own, and even OS’.

Again, Statista’s 2022 data states that the Big Three are responsible for 29% of the total gaming industry revenue. Sony, being the largest holder of the said revenue each year.

Other companies that are able to compete with the aforementioned giants include first and foremost, Tencent. Even though Tencent does not belong in the Big Three, it has been the biggest company based purely on video game revenue in recent years making millions annually.

Apple and Google are also the two companies that attract surreal amounts of revenue from their platforms and video games, reaching 15 billion and 13 billion in 2021.

Honorable mentions that our long-time readers might feel more connected to our Activision-Blizzard (Call of Duty franchise), Electronic Arts (Need for Speed), Roblox, etc. Each bringing millions to their respective companies each year.

Hardware as a Major Factor

Often overlooked in these kinds of articles, hardware manufacturers enjoy substantial benefits and cost cuts when it comes to revenue, annual gains, and more. If we recall the mention of the Big Three from before, we can continue by saying that the same companies hold considerables shares when it comes to hardware component manufacturing and thus selling to other companies.

For example, the Nintendo Switch is one of the best-selling video game consoles of all time as per Statista, Other consoles from the Big Three include Sony’s Playstation series with the latest Playstation 5 cutting-edge technology and Microsoft’s Xbox series.

As of July 27, 2023, over 40 million PlayStation 5 (PS5) units have been sold worldwide while Microsoft by comparison has sold at around 22 million during the same time span.

Similarly, the battle for console and exclusivity rights is another fierce arena where major companies fight for millions each day. With over 200 major titles expected to release in early 2024, 115 are exclusively designed for Playstation, while others are purely designed for Xbox.

As such, it becomes clear to see how the gaming industry is one of the fastest growing, most innovative, and one of the toughest markets to compete in today.

With major companies establishing monopolies over hardware and software components, new developers and small companies find it difficult to break through and make a name for themselves. Nonetheless, those who succeed have major benefits to reap and millions of dollars to make.

^[1] https://www.statista.com/outlook/dmo/digital-media/video-games/worldwide

^[2] https://www.statista.com/statistics/1175322/video-game-employment/

^[3] https://www.statista.com/statistics/1175456/video-game-software-development-employees/

^[4] https://www.ibisworld.com/industry-statistics/employment/video-games-united-states/

^[5] https://www.statista.com/topics/868/video-games/#topicOverview