| Playable media & games market research

GLOBAL GAMES MARKET REPORT2015

Entering the next era of interactive entertainment
SuperData Research

May, 2015

Global Games Market Report2015 | Copyright 2015 SuperData Research | www.superdataresearch.com

| Playable media & games market research

Executive summary
Asia ascends the throne of the largest global

games market in near future. The North

American market remains strong, but the

popularity of free-to-play and mobile will soon
give Asia leadership.
Global games market now generates $74.2

billion a year (2015E). Digital game categories

like mobile and Free-to-play drive industry
growth, as virtual reality and gaming video
content emerge.

New devices and platforms drive growth in

interactive entertainment. The retail-based

business is set to decline once the current
hardware cycle starts to mature early 2017.

Games claim growing share of revenue in key

entertainment markets. In the United States,

the games market has almost tripled its
share of the total entertainment market in
last 30 years.

Interactive entertainment enters next era as

users take charge. Following physical and

digital distribution, the games industry is
shifting toward user control, ownership and
content creation.

Join us on May 29th for a webinar that

discusses the key market trends in interactive
entertainment and previews this years E3.
Sign up here: http://eepurl.com/bmWcF9

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| Playable media & games market research

Note from the analyst

The global games market is booming. Over the past decade interactive entertainment has almost tripled
in size as a result of a range of innovations: smartphones have elevated mobile gaming to unprecedented
heights, improved broadband speeds and infrastructure have propelled online gaming forward, and novel
revenue models and digital distribution have greatly expanded the addressable market.

Joost van Dreunen

joost@superdataresearch.com

In the games market today it is clear that the industrys gravity point has shifted from physical to digital
media. And in response, both publishers and retailers are adjusting their strategies to stay relevant to
consumers and capitalize on the markets momentum. Yet innovation keeps moving forward and on the
horizon we can begin to see the dawn of whats next in gaming.
Interactive entertainment is entering its next era: PLAYABLE MEDIA
As the industry has changed, so, too has the audience. Already did we establish that gamers today are
not the same ones who have traditionally been considered its core audience. But now that gaming is
mainstream, audience behavior is different, too. Today, people dont just consume entertainment but
increasingly play an active part in it. Ranging from modding to streaming, from cosplay to competitive
gaming, the market for gaming presents a much broader and more diverse mix of opportunities and
challenges than ever before.
In this report, we provide an overview of SuperDatas market picture by breaking down the various game
categories we identify in the market and by providing a comprehensive overview of where we believe the
market is headed.
For an even deeper dive into the data and trends, please join us for a free online webinar on Friday May 29
at 2:00 pm EST leading up this years E3 in Los Angeles. Yes, its free, but seats are limited. Details at the
end of this report.
We hope you can join us!

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| Playable media & games market research

Asia will soon ascend the throne of the largest global games market
The N. American market remains strong, but the popularity of free-to-play and mobile will soon give Asia leadership.

Global games market,

by region (2015E, billion $)

North America leads the global games

market with $23.6B in 2015E. The
growth momentum in Asia ($23.1B) will
allow this market to soon become the
biggest region for games. This gives
Asian publishers a strong position when
looking for opportunities in the west and
forces western game companies to
formulate a strategy for the Asian
market. Meanwhile, digital distribution
has allowed the European market
($22.1B) to grow, too, as Eastern
Europe and Russia play a more
prominent role in the overall global
market. Finally, the Latin American
market ($4.5B) is showing a declining
growth trajectory, but remains a
worthwhile region for publishers with a
focus on free-to-play.

Europe

N. America

$22.1

$23.6

billion

billion

Asia

$23.1
billion

LatAm

$4.5
billion

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| Playable media & games market research

Global games market now generates $74.2 billion a year (2015E)

Digital game categories like mobile and Free-to-play drive industry growth, as virtual reality and gaming video content emerge.

Global games market,

by segment (2015E, billion $)
Retail*
$19.7B
Virtual reality $225M
eSports $612M
Gaming video content $1.5B

$74.2B

Mobile gaming accounts for roughly a third

($22.3B) of the global games market.

Mobile
$22.3B

Digital console $3.1B

Social
$7.9B
PC DLC
$7.5

Digital distribution adds a combined $24

billion to the global games market.
Categories like free-to-play MMO ($8.7B),
social gaming ($7.9B) and PC DLC ($7.5B)
successfully leverage digital distribution and
innovative business models.

Total global games

market, 2015E.

Pay-to-play MMO $2.7B

Despite being in decline, retail-based game

sales still total $19.7B in annual sales,
making it the second largest category in
interactive entertainment worldwide.

Free-to-play
MMO
$8.7B

New forms of interactive entertainment

appear on the horizon and carry the promise
of growth. Audiences show a growing
appetite for real-life competitive gaming
events and the availability of both on- and
offline gaming video content via YouTube,
Twitch and Azubu. Virtual reality looks
promising, but has yet to deliver.

* Entertainment software sales only.

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| Playable media & games market research

New devices and platforms drive growth in interactive entertainment

The retail-based business is set to decline once the current hardware cycle starts to mature in early 2017.

The global market for interactive entertainment

continues to prosper. Consumers everywhere
show strong support for more accessible devices
like smartphones and tablets, digital distribution
channels and innovative monetization strategies.
This will continue to grow the worldwide market
at a compound annual growth rate (CAGR) of
4%.

Mobile gaming drives worldwide market growth.

With $24.8 billion in anticipated sales in 2018E
and a CAGR of 7%, mobile dominates the global
market.

Traditional game segments decline in favor of

digital categories and playable media. As the
importance of retail-based sales starts to erode
with the maturation of the console cycle, we
expect new immersive forms of interactive
entertainment such as virtual reality, gaming
video content and eSports to gain in relevance.

Global games market,

by segment: 2014-2018E ($ billions)
$8.0

$7.9

Social

$2.1
$7.6
$0.6

$2.7
$7.8
$1.0

$3.0
$8.0

Gaming video content

$1.3

Virtual reality

$9.7

$10.3

$10.9

Free-to-play MMO

$3.3

$3.5

$3.8

Digital console

$23.6

$24.5

$24.8

Mobile

$0.8

$0.9

$1.1

eSports

$7.9
$7.9
$7.9
$1.0
$7.1

$1.5
$7.5
$0.2
$8.7

$8.0
$3.0

$21.4
$0.4

$3.1

$22.3
$0.6

PC DLC

$17.3

$19.7

$21.7

$20.8

$18.9

Retail

$2.7

$2.7

$2.4

$2.2

$2.0

Pay-to-play MMO

2014

2015E

2016E

2017E

2018E

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| Playable media & games market research

Games claim growing share of revenue in key entertainment markets

In the United States, the games market has almost tripled its share of the total entertainment market in last 30 years.
Share of GAMES in total entertainment
market in the United States: 1985 vs 2015E

1985
$79B

The aggregate earnings for entertainment in the United States

has grown from $79 billion (1985) to $200 billion today. Print
publishing (e.g. newspapers, magazines) in particular has seen
its overall market share decline, from 44% in 1985 to 19%
today (2015E). Traditional forms of entertainment like music and
box office sales have managed to hold on to their market share
of around 5% for the entire period. Cable television, on the
other hand, has more than doubled and now claims 29% of
total market earnings with $57B in 2015E revenues.

5%
2015E
$200B

13%

Games now account for 13% (2015E) of total earnings in the US

entertainment market. As the third largest segment in the

Shown: Combined earnings for total entertainment market in the United States in 1985 and 2015E, which
here consists of newspapers (2015E earnings: $21B), magazines ($15.7B), music ($9.1B), broadcast
television ($43.2B), cable TV ($57B), broadcast radio ($17B), film box office ($10.5B) and video games
($25.4B). Sources: the Motion Picture Association of America, Recording Industry Association of
America, National Cable & Telecommunications Association and the Newspaper Association of America.

United States, interactive entertainment totals $25 billion in

2015E, up from $4.4 billion in 1985. As consumer preferences
have shifted, video games have become a more popular
category, allowing it to grow and become second only to
broadcast and cable television.

$ billions

NEWSPAPERS

MAGAZINES

MUSIC

BROADCAST
TELEVISION

CABLE TV

RADIO

FILM BOX OFFICE

VIDEO GAMES

2015E Revenues

$21

$16

$9

$43

$57

$17

$11

$25

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| Playable media & games market research

Lifecycle stages for key segments in interactive entertainment

Following physical and digital distribution, the games industry is shifting toward user control, ownership and content creation.
Accelerating

1. Physical media

INNOVATIVE MOMENTUM

Lifecycle: LATE
With the release of new hardware, the retail-based games market
continues to maintain its global relevance totaling almost $20 billion
in annual revenues (2015E).

Slowing

Retail
$19.7B

Innovative momentum: SLOWING

Despite an increase in physical game sales in the past few years,
the segment allows for little innovation and is fully matured. Both
retailers (e.g. GameStop) and publishers (e.g. Electronic Arts,
Activision Blizzard) deploy increasingly digitally-focused strategies to
mitigate risk and the inevitable decline in software sales as the
hardware market saturates.

Worldwide revenues 2015E

Late

LIFECYCLE

Early

Global Games Market Report2015 | Copyright 2015 SuperData Research | www.superdataresearch.com

| Playable media & games market research

Lifecycle stages for key segments in interactive entertainment

Following physical and digital distribution, the games industry is shifting toward user control, ownership and content creation.
Accelerating

2. Digital media

INNOVATIVE MOMENTUM
Slowing

Lifecycle: CURRENT
Increased broadband penetration and
improved infrastructure greatly
increases demand for interactive
entertainment across a range of
devices. Developed markets
are invigorated by novel
experiences and devices,
and innovative revenue
models sustain the
Social
exploration of traditionally
$7.9B
inaccessible markets.

Digital
console
$3.1B
Mobile
$22.3B
Free-to-play
$8.7B
PC DLC
$7.5B

Pay-to-play
$2.7B
Late

Innovative momentum: VARIABLE

Segments like social and pay-topay MMO games are showing
signs of slowed innovation as
consumers switch over to new
devices (e.g. mobile) and
business models (e.g. free-toplay). Categories like mobile see
growing costs of user acquisition
and PC DLC faces discovery
issues. Overall, the digital era is in
full swing and continues to
present consumers with new and
creative forms of game play.

Worldwide revenues 2015E

LIFECYCLE

Early

Global Games Market Report2015 | Copyright 2015 SuperData Research | www.superdataresearch.com

| Playable media & games market research

Lifecycle stages for key segments in interactive entertainment

Following physical and digital distribution, the games industry is shifting toward user control, ownership and content creation.
Accelerating

3. Playable media

INNOVATIVE MOMENTUM

Lifecycle: EARLY
Audiences seek to actively engage with and explore entertainment
beyond the narrative boundaries set by game publishers. Both
amateurs and fans distribute a growing library of gaming video
content via online channels. Simultaneously, consumers seek out
ways to physically express their enthusiasm via cosplay and
competitive gaming.

Slowing

Innovative momentum: ACCELERATING

Platform holders like Microsoft, Facebook, Sony, Valve and Google
aggressively pursue virtual reality in order to claim the largest
consumer audience. Brand holders and advertisers explore novel
ways to sponsor playable media to re-connect with a generation
that is cordless, device agnostic and incredibly tech-savvy.

eSports
$612M

Virtual reality
$225M

Gaming video
content
$1.5B

Worldwide revenues 2015E

Late

LIFECYCLE

Early

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Interactive entertainment enters next era as users take charge

Following physical and digital distribution, the games industry is shifting toward user control, ownership and content creation.
Accelerating

1. Physical media

2. Digital media

3. Playable media

INNOVATIVE MOMENTUM

Digital
console
$3.1B

eSports
$612M

Mobile
$22.3B
Free-to-play
$8.7B

Slowing

Retail
$19.7B

Social
$7.9B

Gaming video
content
$1.5B

PC DLC
$7.5B

Pay-to-play
$2.7B
Late

Virtual reality
$225M

Worldwide revenues 2015E

LIFECYCLE

Early

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Key challenges and drivers of change for interactive entertainment

Join us for a webinar that discusses the key market trends in interactive entertainment and previews this years E3.

On Friday, May 29th at 2:00 pm EST we will be hosting an online webinar in which we present our view of the global games
market, its major drivers of change and the opportunities we see emerging.
Key topics we will discuss:

Diversity: How can publishers capitalize on the shift toward a more diverse audience?
Mobile user acquisition and discovery: In mobile space everyone can hear Kim Kardashian scream.
Platform shift: Foreseeing the true vision of virtual reality and other spectacular imagery from the future.
East vs. West: How high are the barriers to entry exactly when building a global game publishing business?
Digital console adoption: Improving margins and tie-in ratios by embracing digital distribution.
Competitive gaming: With $612M in annual revenues we can finally stop calling eSports a fad.
Gaming video content: Vital new marketing avenues that the big guys cant seem to understand.
E3 Preview: What to expect at this years conference in Los Angeles, and what not to.

Date & Time: Friday May 29th at 2:00 pm EST / 11:00 am PST
Sign up: http://eepurl.com/bmWcF9

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| Playable media & games market research

Company summary
SuperData provides relevant market data and insight on digital games and
playable media. Founded by veteran games industry researchers,
SuperData covers the market for free-to-play gaming, digital console,
mobile, PC downloadable, gaming video content and eSports.
Monthly analyses and industry reports using digital point-of-sale data.
Using digital point-of-sale data received from publishers, developers and
payment service providers, we base our analyses on the monthly spending
of 37 million paying digital gamers, worldwide.
Understand what people play, connect to and spend on. Our research combines
transaction-level data with qualitative consumer insight. Our leadership
team has experience spanning across major research firms, including NPD,
Nielsen, DFC Intelligence, Comscore, Experian, Jupiter and Forrester.
A next gen approach for next gen entertainment. Our customer base includes
legacy publishers (e.g. Activision/Blizzard, Ubisoft), digital-only publishers
(e.g. Nexon, Tencent, Wargaming), media companies (e.g. Google, CocaCola) and industry service providers (e.g. PayPal, Visa, GameStop).

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Contact

CEO
Joost van Dreunen, Ph.D.
joost@superdataresearch.com

Senior Analyst, Consumer Insights

Stephanie Llamas
stephanie@superdataresearch.com
401 Park Ave South, 10th Floor
New York, NY 10016
+1 (646) 248 5240
www.superdataresearch.com
Twitter @_SuperData

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