The increased demand for games and the rising quality thanks to technological advancement and development is only contributing to adding more value to this prominent industry, while the revenues are on the rise as a consequence, too, becoming a point of interest for investors as well. As Millennials are spending more time playing games, making a major targeted audience for game developers and gaming companies, the demand for high quality and attractive games have conditioned the rise of the gaming industry, which is only becoming larger from year to year with an average growth rate of 8.2% on annual basis.
Owning At least One Stock in the Gaming Industry
Not only that Millennials like to play attractive, high-quality games that come with more expensive and more advanced equipment and pricier games and in-game items that can be purchased for creating a more effective gameplay, but younger generations such as generation “Z” that is only coming of age now are interested in gaining access to video game streaming websites, such as Twitch in the ownership of Amazon.com, where users can watch other players in action without being directly involved in the game.
This example shows how progressive the industry of gaming is becoming, while analysts are predicting that the industry will get to see a market cap of 143 billion dollars by 2020.
At the same time, new sectors are emerging within this prominent industry, placing a focus on mobile gaming, which is now weighing around 50 billion dollars in revenue, also representing one of the fastest growing sectors.
Moreover, the advancement of technology within manufacturers such as NVIDIA is also driving more revenue to gaming companies, while the industry found a way towards accessing higher margins.
This is the case because gaming companies usually relied on new game releases which usually happens once in a year or every now and then, which limited the inflow of cash to the gaming industry.
However, with the changing trends, the industry is growing, able to acquire a year-round profit with consistency which appears to be doing wonders for gaming companies and the industry of games in general.
Video Game Industry – Statistics & Facts
A video game is an electronic game that can be played on a computing device, such as a personal computer, gaming console or mobile phone. Depending on the platform, video games can be subcategorized into computer games and console games. In recent years, however, the emergence of social networks, smartphones and tablets introduced new categories such as mobile and social games. Video games have come a long way since the first games emerged in the 1970s. Today’s video games offer photorealistic graphics and simulate reality to a degree which is astonishing in many cases.
New Video games are a billion-dollar business and have been for many years. In 2016, the video game market in the United States was valued at 17.68 billion U.S. dollars. That same year U.S. consumers were said to spend roughly double the amount on gaming content, hardware and accessories. What is important is that the first generation of gamers is now grown up with significant spending power; therefore, despite high penetration rates among kids, video games can no longer be considered solely a child’s play. In fact, it was found that video gaming is gaining popularity among seniors in the United States. Fun and mental agility are among the main reasons cited by older gamers as to why they choose this pastime.
Among the many prosperous representatives of the video game industry are the three major players that have been in the game for decades and remain in the leadership positions as of 2016. Those three are: Sony, Microsoft, and Nintendo. Sony’s PlayStation 4 is the bestseller among current generation consoles. By the end of 2017, it was expected that Sony would sell over 21 million units of the popular console. All three gaming brands are also the most recognized among gamers in the United States, with Nintendo being the frontrunner. Some of the popular video games: Kareem Hunt video, Adam Sandler Video Game, New Zelda Game.
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