Dubai: The video gaming industry is the fastest growing among the media segments globally and regionally, industry experts told Gulf News.
Christine Arrington, senior games analyst at IHS Technology, said that there has been a decline in physical media spending across games, movies and recorded music but games’ lead in the digital market is formidable, a remarkable transformation since 2008.
The global video gaming spend is expected to grow to $92 billion (Dh337.93 billion) this year, larger than direct consumer spending on movies ($62 billion) and recorded music ($18 billion) combined.
In the Middle East and North Africa region, Jayant Bhargava, partner at Strategy& (formerly Booz & Company), said the industry was worth around $1.5 billion last year and is expected to be close to $1.7 billion this year.
He said the industry has exceeded even other fast-growing emerging markets like Russia, China and South Korea and is growing faster than the global average.
Tuong Huy Nguyen, principal research analyst at Gartner, said that the industry is very robust in terms of revenues from different platforms — PCs, smart devices, hand-held and consoles.
There will be “different growth rates” for all the platforms.
PCs still dominate the gaming market but the face of the industry is changing fast due to smart devices like smartphones and tablets.
In the region, consoles still contribute the major chunk (around 50 per cent), followed by mobile (around 40 per cent), and the rest is from online. Bhargava said that PC gaming is small in value proposition and spend than console and mobile. PC gaming is around 12 per cent in the region.
“The main reason is that the number of fixed broadband customers is much smaller than mobile broadband users in most of the emerging markets,” he said.
Piers Harding-Rolls, head of games analysis at IHS Technology, said that China, Korea and South East Asia have grown rapidly in recent years and China will overtake US as the largest games market this year. It will be worth $20.3 billion versus the US’ $19.7 billion.
The industry landscape is changing fast in these markets due to the accelerated spending on apps.
The global market will touch $100 billion by 2017, according to IHS.
Arrington said that there will always be demand for console games and the key indicator is the virtual reality (VR) and augmented reality (AR). Console makers are always looking for the next big thing.
“They are trying to figure out how they can make the experience on console bigger, better and more immersive,” she said.
Even though virtual reality has been there for a couple of years, many manufacturers are getting serious about it this year.
Virtual reality is an artificial environment to create a simulated three-dimensional world and there have been several virtual reality devices since 2013 that seek to enter the market in a bid to enhance the game experience.
One of the “major obstacles” is that nobody in the VR and AR industry really knows what consumers want.
Arrington said that traditional big publishers are waiting for the VR to have a decent installation base to get into the market, although all are experimenting in-house.
“VR will be an integrated part of the console feature and will become mainstream in the next five years,” she projected.
Nguyen said that the volume of the games on VR is not there but there are few quality games, but the price point is not viable.
“We are seeing interest from developers for developing VR games. Still, as with smartphones, VR systems will need to feature more games that are fun and simple to play in order to become it a mainstream option,” he said.
On whether cloud gaming is going to replace the consoles, Arrington said that the cloud gaming business model is still not there yet.
“It is critical for the PlayStation and Xbox brands to compete as they can extend the PlayStation and Xbox environments to a variety of devices beyond the living room in bid to help them keep their toehold in the market but it is too expensive to stream and the content is not there,” she said.
The contents right now are very old and the cost has to come down and publishers have to be more interested in it.
Even though Android TV is getting into the living room space, Arrington doesn’t expect consumers to be taking to it too quickly.
She said that they have their Android games on the phones and tablets and they seem to be satisfied with that.
