One of the most lucrative sectors in the world today is the video game industry. The global video game market generated $159.3 billion in revenue in 2020, and by 2023, it is expected to reach $200 billion. What makes video games so lucrative, then?
Video games’ versatility in terms of monetization is one of the key factors contributing to their high financial success. For instance, many games allow for in-app purchases, which allow users to spend real money on in-game things like costumes or weaponry. Additionally, a lot of games include subscription-based business models, where players pay a monthly price to access special features or material. Loot boxes are another feature that some games offer, allowing players to pay real money for the chance to acquire a random assortment of virtual goods.
The capacity of video games to appeal to a large audience is another factor in their financial success. Video games are now more widely available than ever thanks to the rise of mobile gaming. The ability to play games on consoles, cellphones, or tablets makes it simpler for consumers to do so from any location. In addition, video games have gained in popularity throughout the years, drawing both ardent and casual players.
Additionally, video games can continue to bring in money years after their initial release. Many video games allow for the purchase of downloadable content (DLC), which allows users to add new levels, characters, or stories to their games after they have launched. This makes it possible for the game’s creators to make money long after the game’s first release.
Chinese multinational firm Tencent Games is the biggest game developer in the world. 2020 saw Tencent Games become the largest game developer in the world with revenue of $13.5 billion. Popular games like League of Legends, PUBG Mobile, and Honor of Kings were created by Tencent Games.
The fact that video games may monetise in a variety of ways, reach a large audience, and continue to make money long after their initial release is the reason why they are so lucrative. We may anticipate even more innovation and profitability in the years to come as the industry expands.