Wednesday, 02 May 2018 01:54

'Loot boxes' and in-game spend driving digital games market to US$160b by 2022

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With new game formats and monetisation strategies at play, developer prospects have been boosted with growth to reach US$160 billion by 2022, up from US$117 billion this year.

The analytical gurus at Juniper Research have forecast that the digital gaming market is "set to be boosted by the increasing prevalence of loot boxes", which are "purchasable in-game packs which contain a random selection of items, thus monetising users in-game".

We're told that the practice has "already proved immensely popular globally, especially in the Chinese games sector".

New monetisation models and game styles

The new research, dubbed "Future Games Market: Market Sizing & Forecasts 2018-2022", argued that "how loot boxes are monetised will be a critical decision for games developers for the future".

Research author Lauren Foye explained: “Loot boxes play upon the gamers’ desire to have the most prestigious and sought-after in-game items, whether these be weapons or cosmetic goods.

"By monetising the random generation of items, developers are effectively encouraging a form of in-game gambling, extending both the lifecycle and engagement of games titles to their audience.”

In addition, the research notes "the opportunity presented by evolving game formats, as evidenced from the surge in popularity of Battle Royale titles, where dozens of players face-off in a ‘last-man standing’ format. Titles include PUBG & Fortnite, each of which hosts 35 million unique players".

Meanwhile, in the well-established mobile games sector, Juniper finds "advertising is set to play a still greater role in monetising consumers whom avoid paying into popular free titles; with ad spend reaching $20 billion by 2022".

Article continues below image, please read on. 

Core devices see uptick in spend

Juniper also states that the console market is "set for a revival, noting that the Nintendo Switch has done markedly well with over 16 million units sold since its March 2017 launch".

"Console revenues are set to hit US$33.2 billion by 2022, up from US$25.3 billion in 2017. The research pinpoints growth in digital formats, as well as anticipated boosts to sales from the next generation of consoles, now expected from 2020 onwards."

For more insights, Juniper has provided, as usual, its free whitepaper: "3 Takeaways from the Booming Chinese Digital Games Market", in the hope of tempting relevant parties to purchase the full research, at relevant prices.


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Alex Zaharov-Reutt

One of Australia’s best-known technology journalists and consumer tech experts, Alex has appeared in his capacity as technology expert on all of Australia’s free-to-air and pay TV networks on all the major news and current affairs programs, on commercial and public radio, and technology, lifestyle and reality TV shows. Visit Alex at Twitter here.

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