Equity Report AND Template

Industry Outlook
The videogame market was valued at $152.1bn in
2019, growing 10.3% YoY from $137.8bn, which is in
line with the previous year’s YoY growth of 10.9%
The industry’s largest market, APAC accounting for almost 50%
of revenues, grew from $71.4bn to $72.2bn, which was strongly
affected by China’s licencing freeze that lasted for 9 months.
North America grew from $32.7bn to $39.6bn showing huge
potential for Activision Blizzard as it is home to over 50% of its
revenues.
EMEA grew from $28.7bn to 34.7bn with strong signs of further
growth. Latin American showed significant growth as it increased
the size of its market from $5bn to $5.6bn
The gaming industry has three main sub-markets: console
games, PC games and tablet/mobile games.
Tablet/mobile games account currently for the biggest share of
players and is expected to continue growing until representing
nearly the half of the players in the next years. PC gaming is
expected to decline and consoles to remain stable.
The industry’s outstanding performance can be attributed to
two main factors.
• Firstly, the gaming space has seen a shift in revenue
sources lately. The increased popularity of free-to-play
games a new source of revenues has emerged: in-game
microtransactions. Players are now able to purchase ingame
items such as cosmetics for real money making it
one of the most prevailing ways of monetization
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The new trend
• Secondly, the variety of platforms available for
gaming are constantly growing, transforming
towards a more portable set up. Gaming studios
increasingly focus on smartphones as the driver of
growth as in 2019 the market share of mobiles and
tablets accounted for 45% with a value of $68.5bn.
This comes in light with a push towards a
subscription-based cloud-based model such
Google’s Stadia or Apple’s Apple Arcade, providing
access to an arsenal of games for a fixed monthly
fee on portable devices.
The new trend is ushering videogame developers to come up
with new ways of monetization such as the creation of in
game virtual economies.
They are either built by the developers or are outsourced to
be overseen by third parties such as DMarket, which has
opened a niche in the videogame market.
Industry experts are expecting a robust growth in B2B
solutions for videogame economies, assisting with the
building and managing of such in game economies, which
will significantly improve gaming experience and increase
activity as individual players can collect, trade, and start up
small in-game operations with their items.