Despite the damaging effects of COVID-19, Mordor Intelligence has stated the gaming industry is expected to surpass $180 billion by 2021. The change in landscape has exposed weaknesses and highlighted opportunities. A seize in worldwide sporting events delivered significant losses and sportsbooks have been left behind. Online gambling has spiked and online betting through virtual horse-racing and the industry driver, eSports are transforming the market. Gambling has been exposed to the virtual world and the advancement of technology is opening up a whole new market filled with diversification and innovation. New technologies like virtual reality (VR) have transformed the gambling market with VR Casinos and VR slots, providing players with the most engaging and immersive experiences.
The pandemic exposed the gambling industry to the new, virtual space that eGaming and eSports have created. The audience is at home and everything is now done on either a Pc, console or mobile phone. In respond to this new trend, online gambling platforms and countries are readjusting their laws and regulations to acquire this new, wider audience. Countries such as Norway have been recognised for their diversification in offering consumers niche online sports and casino games. Statista has estimated the global online gambling market to be at $92.9 billion by 2023 and technology has a key part to play in this. The industry outlook for the gaming sector proves to be very exciting and the future is hinting that any companies that have not entered the virtual world, offering creative innovation and seamless accessibility through multiple online channels will not only appear dramatically outdated, but cease to exist.
eSports, whilst still emerging and gaining exposure is at the forefront of the gaming sector and is a lucrative market valued at over $950 million. The industry is growing exceptionally well and the potential is estimated by Statista to reach over $1.6 billion dollars in 2023. However, the global eSports gambling and betting market is leading the industry, worth over $14 billion dollars and gaining a 30% increase in new gamblers in one month alone, according to ESTNN. The industry performance grew over the pandemic, eSports betting provided consumers with extremely similar alternatives to traditional sports betting with players being are able to wager on matches of their choice. The eSports industry is providing consumers with vast amounts of diversification with eSport Jackpot games that include products such as sportsbooks for players to bet on eSport matches and events. It has also further diversified into casino games with products like poker and roulette. Market research demonstrates the growth in the eSports sector by license applications increasing due to companies eager to attain their market share in this booming industry. Top jurisdictions that are at the forefront the industry hold robust regulatory frameworks and competitive fiscal regimes with advantageous tax benefits like the Isle of Man who are leading the industry having acquired their first eSports betting license in 2015.
eSport live streaming is another popularity amongst gamers which has surged the industry performance. Online gaming platforms such as Twitch received over 2 billion views in an hour and the European Business Review has ranked game streaming as the most prominent trend in 2021. Live streaming also provides gamers with competitive rewards such as large cash prizes, an example is the 2019 Fornite World Cup prize pool which surpassed $30 million. Market research has outlined that streaming is the future of the gaming industry and mobile gaming is leading this movement. Mobile streaming, which is still emerging has significant growth potential by providing gamers with seamless accessibility, no consoles are required simply a connection to the internet.
Mobile gaming has erupted across the globe, L.inchpin has valued the mobile gaming market at $60 billion, with an expected increase by the end of 2021 to represent more than half of all gaming revenues. Entrepreneur India has stated that 85% of online gaming in India is through mobile gaming. The Indian market is the fastest growing, recognising that smartphones are the most accessible to the masses. China have announced that by 2025 Beijing will be the international online games capital and research has demonstrated that 5G is at the forefront of the mobile gaming sector and supporting virtual reality in China. An example is Migu Quick Gaming, a branch of the China Mobile the telecom provider which has created 5G VR cloud gaming.
Innovation in technological advances such as cloud sharing, augmented reality and virtual reality have also been recognised as trends leading the gaming sector in 2021. In 2019 Pokémon Go incorporated augmented reality in their new game and the market responded with one billion downloads. Game developers are recognising these innovative advancements and increased level of diversification and competition.
Gaming companies that provide consumers with virtual reality are transporting them to another world creating games that are infectiously engaging and exciting. Cloud sharing provoked a break-through in the industry and companies such as Google and Microsoft are providing consumers with a cloud game streaming service which allows gamers to stream games over the internet by using software from a remote data centre. Gamers can stream games directly to their smartphones and TVs, eliminating the need for PCs and consoles. Cloud sharing has considerably expanded the market, practically anyone with a smartphone which Statista has estimated 3.5 billion people can download and play games anywhere, at any time.
Mobile games have been identified as the third most popular app type and this popularity is continuously increasing the competition between gaming companies. Mobile gaming is expected to achieve more than half the total revenues in the gaming market by 2021 and Gaming companies are harnessing this by new monetizing strategies. Rewards, advertisements and various payment methods are all providing gaming companies with multiple revenue streams. Gaming companies are taking advantage of the accessibility in the mobile gaming market to reach a wider market by producing games that download for free. The introduction of the payment method, In App Purchases (IAP) allows gaming companies to create revenue whilst the gamer is playing. Gamers can purchase virtual goods such as tokens or coins which they can trade or win off each other which increase their game level. Gaming companies are also using subscriptions as a new payment method. Google experienced a 70% growth in subscriptions and has released a new cloud sharing service called ‘Stadia’ where gamers can play on mobile games by paying a monthly fee. Gaming companies have also introduced in-game advertisements where gamers can earn points to pay for IAP by watching these advertisements, which benefits both the gamer and the company.
The breakthrough of Cryptocurrencies have also entered the gaming market, providing players with another payment option. Gaming companies recognised the success of Bitcoin which offers consumers further accessibility and diversification in the gaming market. Due to this success of Bitcoin other cryptocurrencies have been introduced such as Altcoins. Crypto games have even been developed, a game called Bitcoinflip gives players the chance to practice trading these crypto currencies, without acquiring real losses. Altcoin Fantasy gives players the chance to play with other currencies with the option to win real crypto currencies through competitions. Gaming companies are also benefiting from the de-centralized nature of the blockchain which has proven its benefits for both the company and the player. Security measures are stronger due to data being stored is stored to the game-on chain and the code can be investigated to demonstrate it has not been manipulated.
Market research suggests this is the beginning of a large, fast growing market, with gaming companies continuously developing games that can provide players with further innovation, engagement and diversification. The Crypto market is also driving the eGaming market in gambling and betting. An example is Luckbox, an eSports betting platform that supports cryptocurrencies on the Isle of Man. Companies are adjusting to these new consumer behaviours that are dominated by technology and meeting these demands with new innovative ways to enhance their service offering to the next level. Countries such as the Isle of Man are benefiting by providing companies with the opportunity to operate with their gold-standard license and robust regulation. Countries like the Isle of Man that are open-minded to change, hold an innovative approach and recognise opportunities are shaping the future and are providing these ambitious companies with means to meet their maximum potential.