- forecasted once, "The prophet of the goal," late Johan Cruyff.
His prediction was for the number of Lionel Messi’s (football = soccer player) Golden Balls.
The prophecy might be underestimated. The Argentinan footballer (soccer player) is a favorite for the 2021 Ballon d’Or with a few years of a career and the upcoming World Cup.
Johan Cruyff’s prophecy wasn’t all about numbers. This vision presented the greatness of the player. The numbers just pointed our attention to Messi and screamed to us: This fellow is extraordinary. It happens somehow that we try to evaluate and put into numbers the potential. Instead, being like Johan Cruyff and follow the guts.
In a previous article, we already defined what skill-based games are and what they definitely are not: they are definitely not gambling games – although they have something in common with them: the audience. For the purposes of this article, it is important to mention that the size of the online market, according to a report prepared by the Research and Markets service, is estimated at $57.11 billion, and will grow to almost $100 billion by 2025.
And now let’s return to eSport.
In 2010, the ESA (Entertainment Software Association) released a report according to which the value of the global games market exceeded $25.1 billion. Ten years have passed, and the game market has seen its value decline for the first time in a long time – by 1.1%. Does this mean problems? It is predicted that even including this decline, the value of the gaming market in 2021 will be $175.8 billion. With this rate of growth, it’s hard to talk about any problems.
When talking about the growth of the global industry, it is difficult to really make reliable predictions. In 2017, industry portals reported that Newzoo analysts predicted that the market would be worth $128.5 billion by 2020. They were wrong. A 2020 report from the same analysts reported that the 2020 gaming market exceeded $143.5 billion, registering growth of +9.0%
If we’re talking about entertainment, the real giant seems to be the movie industry: Disney owning Lucasfilm and a host of other studios, studios and movies – they all command the hearts of billions. Meanwhile, when the global film industry surpassed $100 billion in revenue for the first time ever in 2019, the game market recorded $125.4 billion in revenue. In early 2021, the media reported that the gaming market had surpassed the corporate industry, and the North American sports market – combined.
As I mentioned earlier, it’s hard to predict what the global gaming market will really look like in the next few years – but it’s not a fortune teller, and as history shows, when it comes to this segment of the economy, you can at best underestimate rather than overestimate. This year’s report prepared by analysts from Newzoo states that by 2024 the number of active players will reach 3.32 billion. What profits can be generated? Well, we are talking about the amount of almost 219 billion dollars.
Already, the number of active gamers will approach 3 billion in 2021, a 5.3% increase over the previous year – referred to as the “boom year”. A major factor in such growth is the growth of the online population – the ever-improving network infrastructure, and the increasingly affordable data package tariffs that users can count on. These factors have a particularly important impact in growth regions such as the Middle East, Africa, and Latin America – these regions are the fastest-growing markets in terms of number of players. Millenials and GenZ living there want to catch up with their Western counterparts as quickly as possible – so if you are an investor, it is the countries of these regions that should attract your attention. Here the “boom” is just beginning. But don’t forget about the players from other regions of the world – here Asia and the Pacific region lead the way – as much as 55% of the world’s gaming population lives here.
I mentioned earlier that the market is currently experiencing a small decline in revenue – this is most likely the result of the ongoing pandemic, because although the number of people playing games is still growing, the production and release of games for PC and consoles are delayed – the reason is the global shortage of semiconductors caused by past, ongoing and future lockdowns. This is affecting the supply of consumer electronics, including computer components. Additionally, it’s hard to create advanced (AAA) productions when development teams have to mostly work from home. This is not a problem that could shake the entire industry, but developers and gamers of PC and console games feel it. However, nature abhors a vacuum and if someone somewhere loses, someone else must gain. In this case it is the mobile games segment, which is growing by +4.7% in the case of smartphone games, and +2.0% in the case of tablet games.
Why am I writing about it? As we know from the previous article, the skill-based gaming market is also included in the esports market. The main platform on which our players operate are just smartphones, which are estimated to generate almost $80 billion in revenue for the gaming industry in 2021, which is as much as 45% of the total market revenue.
The esports market is growing the fastest of all gaming market segments. In 2015, overall esports revenue was around $325 million. Just two years later, global revenue was double that amount, or $655 million. The Statista website reports that the estimated amount of revenue for 2021 will be over a billion dollars, and by 2024 it will be over a billion and a half.
Although the majority of the esports market’s profits continue to come from PC gaming, the rest – the increasingly fast-growing mobile segment – is also worthy of attention. Based on this, we can imagine the value of the skill-based gaming market itself. Let me repeat – with such a fast growing market it is difficult to make predictions about the development – although the main “problem” here may be the underestimation of the rate of development. But let’s try to do it on the example of India, where this segment is best described. According to a BIS Research report, this market is expected to generate $3.6 billion in profit by 2022. It’s hardly surprising to see such an estimate when you find that India had just 20 million gamers in 2010, while that number has grown to 250 million in 2018. When we look at the market growth shown above, it’s clear that what’s happening in India is not unusual – it’s a trend that’s popping up everywhere, heralding a good time for the skill-based gaming segment.
Does it really matter? Lionel Messi is outpacing the entire competition, he’s creating a league of his own.
Just for the purpose of this article, allow me to treat the Argentinian footballer instrumentally and compare what he’s doing to the market. Creating a league of his own – ringing some bells? Isn’t it similar to Uber and Airbnb? The experts call it disruptive innovation. Can you estimate the value of something that it’s changing everything that already is?
Probably it will take the entire market? Maybe it will even enhance it?
So will be with skill-based games. Millennials and Gen Zs are disrupting the world we know, and are changing the status quo. And skill-based games might disrupt the entire gaming world. Might or will?
Here in Reality Unit, we dare you to follow your guts…and go all-in in skill-based games!
1 – Raport Newzoo 2020
2 – Raport Newzoo 2021
3 – Raport Newzoo 2021
About the Author:
Michał Stonawski (born 1991 in Kraków) – writer, publicist, game designer.
Originator and co-author of the anthology “Map of Shadows”, author of the ebook collection of short stories “Strange Days” (published by Ebookowo 2018). In July 2020, he debuted his first full-fledged paperback book; “Paranormal: True Stories of Hauntings” (published by Znak), which gained bestseller status.
Proudly working with RealityUnit as a game designer.