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PC Games expected to reach $42 billion in revenues by 2020

The latest generation of gaming consoles has been an exciting time for gamers. And with Project Scorpio and Playstation VR on the horizon, it is looking to get more exciting. But gaming on PC is still the biggest market for games in terms of sales revenue.

Microsoft announces Project Scorpio

Microsoft announces Project Scorpio

PC gaming started making a comeback in sales over the past few years. And as we reported earlier this year, PC gaming has far outpaced Console and Mobile Gaming in terms of digital sales.

PC gaming sales revenue expected to reach $42 billion by 2020

Now, a new report by DFC Intelligence on the global PC gaming market forecasts PC games hitting $42 billion in revenue by 2020. Global sales revenue for the market is currently at $30 billion. So a $12 billion increase by 2020 means DFC is projecting a hefty annual growth rate for the entire market of 8% for the next five years.

Gameindustry.biz dove into the numbers to see what trends DFC Intelligence is noticing. DFC estimates there are 300 million core and moderate PC gamers driving growth around the globe. The biggest source of growth is China, with $12 billion in revenue in 2015. The US is second at $4.2 billion, and South Korea rounds out third at $2 billion.

DFC Intelligence's revenue projections for PC gaming ,via Gameindustry.biz

DFC Intelligence’s revenue projections for PC gaming ,via Gameindustry.biz

Key current trends in the PC Gaming market

Gameindustry.biz pulled out the following 10 PC Gaming trends outlined by DFC Intelligence:

  • An increased diversity of game types and business models.
  • A small number of major new launches including Grand Theft Auto V, Overwatch, Cities: Skyline and The Witcher 3.
  • More AAA titles are starting to release for both console and PC.
  • Thriving Multiplayer Online Battle Arena (MOBA) games led by Dota 2, League of Legends and Heroes of the Storm and top first-person shooters like Counter- Strike Global Offensive are driving healthy growth of eSports tournaments.
  • Virtual reality has gained a great deal of media attention and should drive spending on PC game hardware that could lift the entire PC game market.
  • Much attention in China and Asia was on growth in mobile games in 2015. This was especially true of Netease who took some major PC franchises to mobile and saw significant revenue growth. However, large Chinese companies like Tencent saw 14% growth in their PC games division in 2015.
  • Many Western games are doing well in China via companies like Tencent and Netease. These include World of Warcraft, Hearthstone, Warcraft, StarCraft II. and Diablo III.
  • There is increasing synergies between mobile games and PC games where gamers can play the same game across multiple platforms.
  • The market for games from smaller developers (indies) continues to grow via distribution services like Steam. The indie game movement can be seen as the new form of “casual” game as traditional casual games have increasingly gone to mobile platforms.
  • Windows 10 did not have a major impact on PC games either positive or negative.

If these projections hold true this could validate Microsoft’s ¬†current strategy. The company’s push to converge PC gaming and Xbox gaming with Windows 10 could be a source of future growth. If PC gaming is outpacing consoles in the global market, especially in growth markets like China, then a more universal approach to gaming like Microsoft’s UWP apps and Xbox Play Anywhere could help differentiate Microsoft’s gaming business. And climbing PC Sales revenue also helps explain console maker’s push for mid-cycle updates to their consoles. ¬†It might be that dramatic growth in PC gaming sales is what’s really pushing console makers urge to keep apace with PC gaming hardware innovation, namely VR and 4K gaming.

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How should Microsoft best take advantage of growth in PC games?