Digital games revenue to double in 2016, research predicts

Posted on Nov 15 2011 - 11:48am by Robert

The global digital games, according to tech research firm Ovum, will more than double in the next five years to be worth as much as $53 billion in 2016.

In the research firm’s new forecast, the Digital Games Forecast 2011 – 2016, Ovum predicts that digital games’ revenues will grow at a CAGR (compound annual growth rate) of 17 percent from $24 billion at the start of 2012.

Digital games include games that are played online on gaming consoles, PCs, and on mobile devices such as tablets and smartphones.

According to Mark Little, an analyst from Ovum, the massive growth of simple games, such as Angry Birds, is the main driver of growth in revenue. He said that the rise of casual games is driving the soaring revenues of digital games.

“With the addition of more and more casual gamers, the market is no longer the sole preserve of the teen male hardcore gamer,” Little commented. “Gaming is fast establishing itself with a much wider mainstream audience, with serious ramifications for other rich-media entertainment such as TV, video and music. Casual games are often simpler to play and easier to learn, making for a more spontaneous experience, ideal for mobile phones and tablets.”

The tech analyst predicts that mobile gaming market revenues will triple over the next five years, hitting $17.5 billion in 2016.

In addition to simple games, the free-to-play business model seems to be another revenue growth driver, encouraging users to buy cheap virtual goods.

“Game publishers’ evolving strategy is turning game products into game services, extending product life with downloadable content that continually refreshes a title’s ability to engage the gamer,” Little added.

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