DIGITAL MEDIA:

VIDEO GAMES
DATA AND ANALYSIS WITHIN THIS REPORT
Overview

Pages Subject Essentials

03 05 Detailed overview
Market scope Video Games are divided into Online Games, Mobile
Customer benefit, Market size Games and Download Games
Future developments, Assumptions and sensitivity Mobile Games are dominating over all markets

06 07 KPI-Comparison
Biggest market is the US with US$11.6 billion in 2016
Market KPI comparison by region in charts
Mobile Games in China will be twice the size of the US
Market KPI comparison by region in tables
in 2021 with a size of US$12.0 billion

08 09 Framework
Key Takeaways Video Games is the biggest segment in Digital Media
Video Games as part of the Digital Media market Global Video Games revenue of US$60.1bn in 2021

10 11 Best practice and deep dive

Statista Digital Market Outlook

Nintendo is one of the largest Video Game companies
Nintendo
by net worth
Impact of Mobile Games on Nintendo stock prices
Mobile Games offer huge potential for Nintendo

12 14 Structure, contacts and imprint

2
DIGITAL MEDIA MARKET
Market focus: Video Games

Video
Fashion
Digital Music ePublishing
Electronics & Media Furniture & Appliances
Mobile Games Online Games Downloads

Food & Personal Care Toys, Hobby & DIY

Video-on-Demand

Statista Digital Market Outlook

3
Focus Segment Other Reports
BIGGEST SEGMENT IN DIGITAL MEDIA MOBILE
GAMES ARE DOMINATING IN CHINA
Customer benefit
The Digital Games market consists
of Online Games, Mobile Games
and Download Games.
Mobile Games are defined as
gaming-applications for smart
devices such as smartphones and
tablets. They can appear as paid
app-downloads and freemium
games that are free to play, but
normally allow in-app-purchases
for various additional content or
access time.
Online Games are defined as so-
called browser games that can be
played directly in the Internet
browser and do not require an
installation as well as so-called
massive multiplayer online
games (MMOG).
Many browser games are free to
play and make revenue with in-
game micro payments for
additional premium content or
functionalities in a similar way to
their mobile pendants.
Furthermore, the revenue of
Online Games includes the
monthly fees of subscription
based games and in-game micro
payments of games which need to
be installed on the computer.
An example of such a game, free-
to-play, with possible in-game
micro payments, and which needs
to be installed, is the so-called
multi-player online battle arena
(MOBA) League of Legends.
The world's most subscribed
online multiplayer game is World
of Warcraft. This game has to be
purchased first and charges a
monthly fee to be played.
Therefore, World of Warcraft
affects both, the Online Games
and the Download Games market.
Download Games refer to online
sales of Video Games for gaming
consoles or PC/Mac via direct
download of the installation file.
Download Games require an
installation on a specific hard-
ware device. Top vendors are
Steam, PlayStation Store or Xbox
Games Store.
Market size
The global Video Games market The largest segment over all
size is about US$50.5 billion in regions is Mobile Games,
2016 and accounts for 55.4% of although we can observe a
the Digital Media market. relatively even split between the
segments in Europe and the
With this share, the Video Games
United States. Mobile Games are
market is by far the biggest
responsible for 37.7% and 37.1%,
market within the Digital Media
respectively, of the total market.
market.
Video Games in China, on the
The United States, China and
contrary, are dominated by
Europe generate a total market
Mobile Games. With a segment
size of US$31.0 billion. 60.4% of
size of US$7.1 billion, Mobile
the global Video Games market is
Games account for 70.0% of the
covered by this amount.
total market.
The United States have a leading
With this amount, the segment
role in the current global Video
Mobile Games accounts for more
Games market with revenue of
than half of the whole Chinese
US$11.6 billion in 2016.
Digital Media market including
Nevertheless, the US market does Video-on-Demand, Digital Music
not have the same extraordinary and ePublishing.
lead as in other Digital Media
This exceptional position is mainly
markets. China is following on a
caused by a huge user base of
Statista Digital Market Outlook
similar level with a market size
Mobile Games in China, which is
of US$10.7 billion.
already at 284 million users in
The market in Europe, however, is 2016.
noticeably smaller with a total
volume of US$8.7 billion.
4
MOBILE GAMES ARE THE DRIVING FORCE -
MOSTLY AT THE EXPENSE OF ONLINE GAMES
Future developments
The global Video Games market
is growing at a CAGR1 of 6.6% to
2021. We see a relatively similar
development over all regions with
Mobile Games as the fastest
growing market.
With an average growth of 3.1%
per year to 2021, the US market is
the slowest growing one. While
Online Games and Download
Games are growing very slowly
with average growth rates of 1.2%
and 0.1% to 2021, respectively,
the Mobile Games segment is
growing with 6.7% CAGR in the
same timeframe reaching US$6.0
billion.
The Chinese market is the fastest
growing with an average annual
growth rate of 8.0%. Mobile
Games are growing on an
extraordinary high level of 11.0%
CAGR to 2021. Thus, Mobile
Games revenue in China will be,
with a market size of US$12.0
billion, twice the size of the
Mobile Games market in the US.
This growth, however, is at the
1: CAGR: Compound Annual Growth Rate/ average growth rate per year.
expense of Online Games. The
Online Games market in China is
shrinking moderately with a
CAGR of -2.2% to 2021. Contrary
to that, the Download Games
market is growing with an average
at 5.3% due to an over
proportional growth of Download
Games users (5.7% CAGR to
2021).
Thereby Download Games in
China have the fastest growing
user base over all regions and
segments.
Although the development of
some big European markets like
Germany or the UK are very
similar to the US with stagnating
Download and Online Games
markets, digitally emerging smaller
European countries like the Czech
Republic or Romania are causing
constant growth over all
segments.
The Video Games market in
Europe is growing with 7.0%
CAGR up to 2021.
Assumptions and sensitivity
The global Video Games market is
mainly driven by Mobile Games.
Reasons for this development can
be found in the general shift
towards the usage of mobile
devices. In this special case the
high performance of Smartphones
and Tablets nowadays allow very
computation-intensive applica-
tions and games.
A certain number of modern
mobile devices even use special
graphic processors units (GPU)
and work on a similar
performance level as stationary
computers or laptops.
This technological development
additionally leads to a recognizable
shift from Browser Games
towards Mobile Games with an
impact on the whole Online
Games segment, as the game itself
does not depend on the pro-
cessing power of a PC anymore.
Furthermore, the high growth rate
of Download Games users in
China is in need of an explanation.
Between 2000 und 2014 gaming
consoles were prohibited by law
in China.
Thus, the demand for gaming
hardware did not began until the
repeal of the gaming console
prohibition in 2014 and the market
is simply not as saturated as in
other regions.
The impact of Augmented Reality
(AT) and Virtual Reality (VR) on
the Video Gaming market has to
be considered distinctively.
Virtual Reality, in particular, is
mostly restricted to Download
Games. It will have a certain
impact on software sales, but has
to be seen as an additional
peripheral equipment market.
Augmented Reality, however, has
already proven its potential in the
Statista Digital Market Outlook
Mobile Games market with the
massive success of the game
Pokmon Go, which already uses
this technology.
5
 VIDEO GAMES IN MA JOR REGIONS
Market KPI comparison by region
United States China Europe

Revenue forecast
+8.0% p.a.
in million US$ by region
+3.1% p.a. 15,713
+5.8% p.a.
13,506 1,956
11,594 11,562
Online Games: 3,495 10,670
3,469 2,184 8,715 3,363

Mobile Games: 12,028 2,660

5,956
4,304 4,612
7,144 3,283
Download Games:
3,822 4,055 3,586
1,729 2,772
1,341
2016 2021 2016 2021 2016 2021

Revenue per user

in US$ by region

37.5 13.4 35.6

2016 41.2 2016 25.2 2016 23.5
32.2 27.4 22.6

Statista Digital Market Outlook

36.4 11.1 38.8
2021 44.8 2021 33.8 2021 28.1
35.2 26.8 26.7

Source: Digital Market Outlook 2016

6
VIDEO GAMES IN MA JOR REGIONS
Market KPI comparison by region
United States China Europe

Revenue
CAGR1 CAGR1 CAGR1
Segment Unit 2016 2017 2018 2019 2020 2021 2016 2017 2018 2019 2020 2021 2016 2017 2018 2019 2020 2021
16 21 16 21 16 21

Total: mUS$ 11,594 12,149 12,606 12,975 13,269 13,506 +3.1% 10,670 11,788 12,862 13,877 14,827 15,713 +8.0% 8,715 9,359 9,980 10,561 11,089 11,562 +5.8%

Online Games mUS$ 3,822 3,880 3,934 3,981 4,021 4,055 +1.2% 2,184 2,131 2,080 2,032 1,991 1,956 -2.2% 2,660 2,806 2,953 3,096 3,234 3,363 +4.8%

Mobile Games mUS$ 4,304 4,796 5,195 5,512 5,759 5,956 +6.7% 7,144 8,222 9,261 10,245 11,167 12,028 +11.0% 3,283 3,591 3,885 4,156 4,399 4,612 +7.0%

Downloads mUS$ 3,469 3,473 3,477 3,482 3,488 3,495 +0.1% 1,341 1,435 1,522 1,600 1,669 1,729 +5.2% 2,772 2,961 3,142 3,308 3,457 3,586 +5.3%

Users
CAGR1 CAGR1 CAGR1
Segment Unit 2016 2017 2018 2019 2020 2021 2016 2017 2018 2019 2020 2021 2016 2017 2018 2019 2020 2021
16 21 16 21 16 21

Total: m 169 166 166 168 170 173 +0.5% 332 341 352 364 377 391 +3.3% 202 200 200 202 205 208 +0.6%

Online Games m 92 93 94 95 95 96 +0.8% 163 166 169 171 174 176 +1.5% 75 77 80 82 85 87 +3.0%

Statista Digital Market Outlook

Mobile Games m 104 112 119 125 129 133 +5.0% 284 298 313 327 341 355 +4.6% 140 146 151 156 160 164 +3.3%

Downloads m 119 118 117 117 116 115 -0.6% 49 53 56 59 62 65 +5.7% 123 126 129 131 133 134 +1.8%

1: CAGR: Compound Annual Growth Rate/ average growth rate per year.
Source: Digital Market Outlook 2016 7
KEY TAKEAWAYS BY REGION
Market sizing subjects for Video Games
United States
US is leading the global Video Games
market with US$11.6 billion in 2016
Mobile Games are the biggest segment
Market size
with US$4.3 billion
Online and Downloads Games are
following not far behind with US$3.5
billion and US$3.8 billion, respectively
Total market is growing with a CAGR1
of 3.1% to 2021
Growth is mainly driven by Mobile
Growth rate
Games
Online Games and Download Games
are stagnating
More powerful mobile devices will
drive Mobile Gaming
VR might have a small impact on
Trend signals
Download Games, but has to be seen
?
more as a hardware market
VR devices using the smartphone will
drive Mobile Games
!: CAGR: Compound Annual Growth Rate/ average growth rate per year
Source: Digital Market Outlook 2016
China
Total market size of US$10.6 billion
Mobile Games is the biggest segment
and accounts for 67.0%
Download Games is by far the smallest
segment with US$1.3 billion
Fastest growing region
Growth rate of 8.0% CAGR to 2021
Further growth in the Mobile Games
segment with 11.0% p.a.
Total market volume will overtake the
US in 2018
Repeal of the gaming console
prohibition in 2014 opened a new
(niche) market driving Download
Games
Mobile devices will stay the first choice
device for gaming in China
Europe
Total market volume is US$8.7 billion
in 2016
Still strong physical distribution of
Games slow down the digital market
Mobile Games is the biggest segment
and accounts for 37.7%
Europe has a growth 5.8% p.a up to
2021
Constant growth over all segments
Mobile Games will take the most
dominating role in 2021 with a share
of 39.9%
Digitally emerging European markets
are driving the overall growth
More reluctant attitude towards
Statista Digital Market Outlook
gaming inhibits the growth
Increasing relevance of eSports
indicates a growing gaming affinity
8
VIDEO GAMES
Digital Media global segment size and growth rates

Global1 Digital Media market revenue CAGR2 16 21

in million US$ by segment

125,403 +6.6% p.a.

23,888
+8.1% p.a.
91,102 13,197

16,163
+7.6% p.a.
Digital Media 9,144

Video on Demand: 67,096 +5.8% p.a.

Digital Music:
50,521
Games:
ePublishing: +6.8% p.a.

Statista Digital Market Outlook

21,222
15,274

2016 2021

1: Only includes countries listed in the Digital Market Outlook

2: CAGR: Compound Annual Growth Rata/ average growth rate per year 9
Source: Digital Market Outlook 2016
BEST PRACTICE: NINTENDO
Company profile
Global presence Background
Nintendo Co., Ltd. is a multi- Besides its hardware branch
national consumer electronics Nintendo acts as a games
and software company based in development company and as a
Kyoto, Japan. Founded in 1889 it games publisher.
originally produced playing
Many well known titles and
cards.
brands like Super Mario or The
Nintendo developed into a video Legends of Zelda came from
game company in the 1970s these development activities.
mainly focusing on the develop-
Today, Nintendo is one of the
ment and distribution of home
world's largest video game
and handheld consoles.
companies by net worth.

Overview Nintendos new role in Mobile Games

Revenue: US$4.4 billion (2016) Nintendos long-standing policy ed from their platform reliant
was not to release their own approach and announced their
content on third party platforms. first own developed game for
Growth (revenue): -8.2% YoY (2015-2016) iOS.
This policy does not allow to
participate at the fast growing This was the first step of
Sold consoles: > 696 million

Statista Digital Market Outlook

and huge segment of Mobile monetizing their huge intellec-
Games. tual property in the fields of
Mobile Games, be it as own
Sold console games: > 4,441 million After decreasing net sales with a
games or as franchises in
negative growth of -8.2% from
cooperation with developers.
2015 to 2016, Nintendo refrain-
founded: 1889

Source: Digital Market Outlook 2016, company information

10
ENTERING MOBILE GAMES SECTOR BOOSTS
NINTENDOS STOCK PRICE
Nintendo Co. Ltd stock price in US$ since March 2016
40

35

30

25

20

15

10

Mrz- April- Mai- Juni- Juli- August- September- Oktober- November-

16 16 16 16 16 16 16 16 16

Statista Digital Market Outlook

This graph shows the develop-
ment of the Nintendo stock
prices since March 2016.
The release of Pokmon Go on
July 6th 2016 caused a massive
peak, as Nintendo owns 32% of
Source: Nasdaq
All trademarks and registered trademarks are the property of their respective owners.
the Pokmon intellectual But nevertheless, stock prices Game. Super Mario Run on
property owner The Pokmon stayed on the plus side and the September 7th. Summarized,
Company. release built a certain awareness, investors see a huge potential in
which can be seen in another opening up the platform reliant
The peak might be caused by a
peak after the announcement of approach towards mobile
misunderstanding that Nintendo
Nintendos first own Mobile devices.
is owning Pokmon completely.
11
VIDEO GAMES REVENUE STREAMS
Market structure and definition
Segment Sub-segments Out of segment

Online/browser games are defined as massive

multiplayer online games (MMOG) as well as casual and
Games on physical data
social games, that can be played directly in the Internet
carriers
Online Games browser and do not require an installation. The
definition covers subscription-based games as well as
freemium browser games with in-game purchases for
additional premium contents or functionalities.

Access fees to gaming

Mobile Games are defined as gaming-applications for networks
smart devices such as smartphones and tablets. Leading
app stores like Google Play and Apple App Store offer
Video Games Mobile Games paid app-downloads (single purchases) and freemium-
games that are free to download, but normally allow in-
app-purchases for various additional contents or access
time.
Free offers

Download Games (full version) refer to online sales of

video games for gaming consoles or PCs/laptops via

Statista Digital Market Outlook

direct download of the installation file and a
Download Games corresponding product key. Full version video games
require an installation on a specific hardware device. Top In-game advertising
vendors are Steam, PlayStation Store or Xbox Games
Store.

In scope Out of scope 12

ABOUT DIGITAL MARKET OUTLOOK

9 Markets, 34 segments & 85 sub-segments Details

Digital Media Connected Car 50 countries
Video-on-Demand, Digital Music, Connected Hardware, Vehicle Services,
Video Games, ePublishing Infotainment Services Direct access & downloads
7-Year coverage: 2015 2021
FinTech Revenue forecasts
Digital Payments, Business Finance,
Smart Home
Personal Finance
Home Automation, Security, Home
Entertainment, Ambient Assisted Living,
eTravel Energy Management
Online Travel Booking, Mobility Services

e-Commerce
User count & penetration
eServices Fashion, Electronics & Media, Food &
Personal Care, Furniture & Appliances, Toys,
Event Tickets, Fitness, Dating Services, Hobby & DIY
Food Delivery

eHealth Digital Advertising

Diabetes, Hypertension, Heart Failure Banner Ads, Video Ads, Search Ads,
Social Media Ads, Classifieds Comparable data

Statista Digital Market Outlook

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13
IMPRINT
Contacts and author

Sebastian Buss
Analyst
Sebastian Buss graduated Business Administration and Business
Psychology in Hamburg, Germany with a specialization in
Consumer Behavior and Market Psychology.
E-MAIL
Before his time at Statista he gained experiences in digital media sebastian.buss@statista.com
markets with a focus on the music industry.
He is working for Statista as a specialist for digital markets, trend WEB
monitoring and data analysis. statista.com/outlook

Released: November 2016

Imprint
Statista Johannes-Brahms-Platz 1 20355 Hamburg +494041349890 www.statista.com

Disclaimer
This study is based on survey and research data of the previously mentioned sources. The forecasts and market analysis presented were researched and prepared by Statista with great
care.

For the presented survey data, estimations and forecasts the Statista GmbH can not assume any warranty of any kind. Surveys and forecasts contain information not naturally
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