Is the Shift to Digital a Key Driver for the Gaming Industry?

According to a research report by PricewaterhouseCoopers (or PWC), revenue from global video games should grow at a healthy rate through 2019. Total video game revenue is expected to rise at a CAGR (compounded annual growth rate) of 5.7% and expected to reach ~$93.2 billion by 2019.

The research report states, “The peak of hardware sales for the latest generation of consoles is likely to be between 2017 and 2018, followed by a decline regardless of whether new consoles arrive.”

The global distribution of digital games is expected to reach $12.9 billion in 2019 and should account for 19.6% of the industry’s overall gaming revenue. However, PWC stated that the physical console market is also expected to drive revenues due to “the ability to trade in physical games, frequently higher digital pricing and a lack of network infrastructure will keep physical distribution relevant.”

In the previous part of this series, we saw that Xbox One (MSFT) and the Japan-based (EWJ) PlayStation (SNE) reported a record for console sales in December 2015.

The social gaming space is set to reach ~$22.5 billion by 2019, with the number of users playing on social media sites such as Facebook (FB) experiencing an increase. According to PWC, India (INDA) and South Africa are expected to drive social gaming revenues in the future.