A decline in gaming console shipments will be offset by growing demand for Toy-to-Life and smartphone supported games says Frost & Sullivan which analysed key gaming markets such as the US,Japan, Korea, China and the UK in terms of hardware and software and offers forecasts until 2020.
Some key findings from the report found that
Mobile games will show significant growth by 2020
Revenue from Console Sales will continue to decline
Marc Einstein research director at Frost & Sullivan said “There will still be significant growth in the mobile gaming market. The recent release of Pokemon Go has provided a proof of concept for augmented reality and location based gaming. The partnership with the game and McDonald’s in Japan also opens the door for new revenue streams for gaming companies. There are also many new interesting areas such as connected toys which will further bridge the gap between digital and physical products so we expect continued growth in the gaming market,” noted Einstein.
Einstein also expects that it will be a matter of time before disruptive payment channels for digital services become popular in emerging markets.
“Countries like Indonesia and Brazil are showing increasing interest in Bitcoin and this will eventually lead to further growth in mobile gaming revenues,” he added.
The gaming console market however has quite a bleak outlook in comparison, with console hardware and software expected to slowly decline from US$23 billion in 2015 toUS$16 billion in 2020. at a negative Compound Annual Growth Rate of 6.6%. Among the key markets,
Decreasing yearly at at a rate of 6.6% .key markets,
The key markets for console hardware and software are USA, Japan and UK and still account for more than 70% of global revenue in the segment in 2015.
Cris Duy Tran, Consulting Analyst, Digital Transformation, Asia Pacific, Frost & Sullivan noted that the massive uptake of mobile games has limited prospects for the console market in emerging markets and impacted sales in developed markets.
“Moving forward, console makers will need to continue to explore new areas to drive business in such as augmented and virtual reality,” he added.