Games News

Analysts expect video game industry to hit $138 billion in 2018

Epic Games
Screenshot of reality rifts from Epic's Fortnite: Battle Royale
Fortnite

Market research firms are increasingly mindful of the gaming industry, with latest reports by the Wall Street bean counters projecting a 13.3 per cent year over year increase in video game spending, which equates to $16.2 billion.

Interestingly, analyst reports claim mobile gaming has enjoyed a decade of double digit growth and will make up for a huge chunk of this, $70.3 billion to be exact. It doesn't take a mathematician to see it makes up for more than half of all gaming revenue in 2018, which is supposed to be a first.

Console gaming is apparently the second largest sector, earning $34.6 billion while PC master race is in third place with only $32.9 billion. The same research firm predicts video game spending to soar to $180 billion by the year 2021, with digital game revenues making up for 91 per cent at $125.3 billion.

A hedge-fund manager Samantha Greenberg recently pointed out that video games are quickly becoming an investor friendly market, thanks to the "recurring revenue model". Greenberg thinks that while games used to be "a very hit-driven business tied to new releases", they've grown to feature a "more predictable and valuable earnings stream".

Greenberg also listed a few companies as good stock ideas, first of them being Take-Two Interactive, whose stock has reportedly grown 60+ per cent in the last year and is expected to rise. Obviously, analysts like Red Dead Redemption 2 as well.

Another household name in the video game industry that was mentioned was Epic Games, the company behind the global phenomena Fortnite, of whom the financial sector is oh-so aware. Greenberg pointed out that Fortnite's appeal covers just about everyone, with its quirky looks but her other assertions was a bit sinister.

Rockstar GamesScreenshot of reality rifts from Epic's Fortnite: Battle RoyaleRed Dead Redemption 2

Greenberg thinks that Fortnite is "training an entire user base on in-game monetization and continual purchases, even after you've downloaded the initial game." Isn't it strange how the simplest of observation by finance people can suddenly get an evil tone?

You can find Newzoo's global games market report here, while CNBC's interview with Greenberg is here.