Thematic Intelligence Video Games 2022

Thematic Intelligence: Technology
Video Games
August 31, 2022 GDTMT-TR-S369
Video Games | August 31, 2022
Contents
Executive Summary ...................................................................................................................................................... 3
Players .......................................................................................................................................................................... 4
Technology Briefing ...................................................................................................................................................... 5
Trends .......................................................................................................................................................................... 9
Technology trends ............................................................................................................................................................. 9
Macroeconomic trends ................................................................................................................................................... 11
Regulatory trends ........................................................................................................................................................... 13
Industry Analysis .........................................................................................................................................................14

Market size and growth forecasts .................................................................................................................................. 14
Mergers and acquisitions ................................................................................................................................................ 15
Venture financing............................................................................................................................................................ 17
Patent trends .................................................................................................................................................................. 19
Timeline........................................................................................................................................................................... 20
Value Chain .................................................................................................................................................................22

Creation layer.................................................................................................................................................................. 23
Monetization layer .......................................................................................................................................................... 25
Distribution layer ............................................................................................................................................................ 30
Device layer ..................................................................................................................................................................... 36
Companies ...................................................................................................................................................................40
Sector Scorecard ..........................................................................................................................................................46

Gaming sector scorecard ................................................................................................................................................ 46
Glossary .......................................................................................................................................................................50
Further Reading ...........................................................................................................................................................54
Our Thematic Research Methodology .........................................................................................................................56
About GlobalData ........................................................................................................................................................58
Contact Us ...................................................................................................................................................................59
WWW.GLOBALDATA.COM © GlobalData Plc 2022 | 2

Executive Summary
Gaming software will become a $470 billion market by 2030 Inside
The gaming software market was worth $197 billion in 2021 and will become
▪ Players
a $470 billion industry by 2030, according to GlobalData estimates. Mobile
gaming will be the dominant segment, accounting for more than 50% of ▪ Technology briefing
global gaming software revenues by 2030. ▪ Trends
The video games industry continues to evolve, driven by changing user ▪ Industry analysis
demands, new monetization and distribution channels, and technological ▪ Value chain
progress. Today’s industry is in the throes of a transformation driven by
themes like 5G, augmented reality (AR), virtual reality (VR), esports, cloud ▪ Companies
gaming, and the metaverse. As these themes mature, competition will ▪ Sector scorecard
intensify among traditional game publishers, tech giants, and companies in
▪ Glossary
other sectors (e.g., retail and tourism). As a result, several leading game
publishers will become M&A targets, with tech giants the likely acquirers. ▪ Further reading
▪ Thematic methodology
Video games are at the forefront of the metaverse
Games and gaming platforms are increasingly focused on the metaverse, a ________________________________
virtual world where users share experiences and interact in real time within
simulated scenarios. Although the metaverse is in the very early stages of
development, game developers and publishers are trying to use it as a Related reports
conduit for the convergence of video games with music and video
▪ The Metaverse
streaming, sports, and digital collectibles. Over the next five years, more
enterprises and consumer brands will invest in video games to enter the ▪ Tech, Media, & Telecom Themes 2022
metaverse.
▪ Augmented Reality
Leaders and challengers ▪ Virtual Reality
Below are some key players across the four layers of GlobalData’s video
▪ Mobile Gaming
games value chain.
▪ Cloud Gaming
Creation layer ▪ Esports
▪ Leaders: Activision Blizzard (in the process of being acquired by
________________________________
Microsoft), Epic Games, Electronic Arts, Microsoft, Krafton, Nintendo,
Sony, Take-Two Interactive, Tencent, Ubisoft, Unity.
▪ Challengers: Bandai Namco, ByteDance, Konami, miHoYo, Roblox, Sea. Report type
Monetization layer ▪ Single theme
▪ Leaders: Alphabet, Apple, Ant Group, Binance, DouYu, InMobi, Meta, ▪ Multi-theme
Metamask, Microsoft, Modern Times Group, PayPal, Tencent, Valve.
▪ Sector scorecard
▪ Challengers: AlphaWallet, Bilibili, Comcast, Samsung Electronics, Skrill.
Distribution layer
▪ Leaders: Akamai, Alibaba, Apple, Alphabet, AT&T, Blacknut, Discord,
Meta, Microsoft, Nintendo, Sony, Roblox, Tencent, Valve, Verizon.
▪ Challengers: Baidu, CareGame, Huawei, NetEase, Rackspace, Rakuten.
Device layer
▪ Leaders: Alphabet, Asus, Apple, Dell Technologies, HP, HTC, Logitech,
Meta, Microsoft, Nintendo, Razer, Samsung Electronics, Sony, Xiaomi.
▪ Challengers: Analogue, Blaze, Corsair, CyberPower, Roccat, TCL, Valve.

Players
The video games industry is an ideal example of a hypercompetitive market. With low barriers to entry and lucrative
revenue opportunities, the number of players in the market is continuously increasing.
The graphic below presents a select list of leaders and challengers across the video games value chain. An exhaustive list
of players in each segment is available in the value chain section of this report.
A select list of leaders and challengers in the video games theme and where they sit in the value chain
Video games value chain Leaders Challengers
Activision Blizzard NetEase Amazon Nexon

Creation layer
Chukong Nintendo Bandai Namco Niantic

Electonic Arts Sony ByteDance Perfect World
Game developers and publishers Embracer Take-Two Interactive Godot Engine Roblox
Game engines Epic Games Tencent Konami Sea (Garena)
Krafton Ubisoft miHoYo Square Enix
Microsoft Unity Netmarble Vivendi (Gameloft)
Activision Blizzard Mastercard Affle (Appnext) One97 (Paytm)

Alphabet (Google) Meta AlphaWallet Paysafe
Monetization layer
Amazon Metamask Axis Esports Razorpay

Ad networks American Express Microsoft Bilibili RFRSH Entertainment
Payment platforms
Ant Group Modern Times Group Comcast Samsung Electronics
Esports organizers
Apple PayPal DAZN Skrill
Brand sponsorship
Media rights Binance Tencent Media.net StarLadder
DouYu Valve Mobvista StarTimes Group
Huya Visa Neteller Stripe
InMobi Xsolla NODWIN Gaming Trust Wallet
A1 Telekom Epic Games Baidu Loudplay

Akamai F5 Networks Bharti Airtel MediaLab AI (Kik)
Alibaba Meta CareGame NetEase
Distribution layer
Alphabet (Google) Microsoft CD Projekt (GOG) Ooredoo

Cloud services Amazon Nintendo China Telecom Qihoo 360
Telecom networks (inc. 5G)
Apple Roblox Cloudflare Rackspace
App stores and online platforms
AT&T SK Telecom Crazy Games Rakuten (Viber)
Social media
Streaming services BBK Electronics Sony Fastly Reliance Jio
Blacknut Tencent HTC StackPath
China Mobile Valve Huawei Telefónica
Deutsche Telekom Verizon Itch.io Telstra
Discord Vodafone Limelight Theta.tv
Acer Logitech Analogue Panic

Alphabet (Google) Meta Blaze Redragon
Smartphones and tablets Amazon Microsoft Cooler Master Roccat
Personal computers
Device layer
Apple Nintendo Corsair Roku

Gaming consoles Asus Razer CyberPower Sennheiser
VR headsets
Dell Technologies Samsung Electronics GamePad Digital TCL
Smart TVs (inc. media streaming
HP Sony Hisense TinyCircuits
devices)
Peripherals HTC SteelSeries Mad Catz Valve
Huawei Turtle Beach MSI Vizio
Lenovo Xiaomi Nvidia Zowei
Source: GlobalData

Technology Briefing
From the heyday of arcade games to today’s mobile and cloud games, the video games industry has been in a continuous
cycle of technological development. As hardware performance improves, game developers find new ways to use it,
spurring demand for faster processors, better graphics, high-speed connectivity, and more sophisticated games.
Video games incorporate a range of technologies that we categorize into three broad categories, namely:
▪ Hardware: This category comprises consoles, personal computers (PCs), smartphones, tablets, and virtual reality
(VR) headsets. It also includes the processors, displays, input devices, and audio equipment that enable gaming.
▪ Connectivity: This category covers cloud and telecom networks that support the distribution of games.
▪ Software: This category includes the games and tools (e.g., game engines and LiveOps) used to develop and run
games.
Every gaming type—including console gaming, PC gaming, mobile gaming, cloud gaming, and esports—incorporates
unique hardware, connectivity, and software combinations.
Below we discuss the different types of gaming and point you to further reading.
Console gaming
Gaming consoles are powerful devices designed specifically for playing video games. There are two main types of gaming
consoles: home consoles, which typically display the games on TVs (e.g., the Sony PlayStation 5 and Microsoft Xbox Series
X), and handheld consoles that are portable with built-in display units (e.g., the Nintendo Switch).
Gaming consoles are in their ninth generation, having matured over the past 50 years in terms of hardware, thanks to
advances in processor speed, graphics, and storage capabilities. Similarly, the distribution of console games is becoming
increasingly digital via online platforms and moving away from physical optical discs and cartridges. This is attributable
to widely available internet access and the proliferation of games as a service. In this model, developers and publishers
can update a game’s content and features after launch to expand its revenue potential and appeal. Users can access the
updates as downloadable content from online platforms.
Leading console makers such as Microsoft, Sony, and Nintendo offer online distribution platforms and services to allow
users to download games to their devices. They aim to harness the digitalization trend in the video games industry and
increase consumer interest in disc-free consoles. For instance, in 2020, Microsoft and Sony launched digital-only versions
of their latest Xbox and PlayStation consoles, alongside disc-based versions. The rapid development of cloud gaming
services, thanks to the availability of high speed and low latency connectivity, is also fueling the feasibility of disc-free
consoles.
There are two main types of gaming consoles

Home consoles (e.g., Sony PlayStation 5 and Microsoft Xbox Series X) and handheld consoles (e.g., Nintendo Switch)
Source: The Express Tribune, Gamers Hideout

PC gaming
PC gaming refers to the practice of playing video games on personal computers. Users can upgrade their PC hardware
(i.e., processors, storage, and displays) to improve the devices’ performance and enjoy high-end games. This flexibility is
the prime factor driving the demand for PC gaming.
Several companies such as Asus, Dell, and HP offer specialized PCs with high-performance graphics processing units
(GPUs), central processing units (CPUs), and cooling systems for the intensive play of high-end games. Gaming PC users
can connect various peripherals (i.e., joysticks and headsets) to enhance input and feedback, making gaming more
engaging and responsive. PC gaming is a primarily at-home form of entertainment, but companies like Valve and Anbernic
are trying to make it portable with their handheld gaming PCs.
PC games were traditionally available as optical discs, but now they are predominantly accessed from online stores via
the internet. Consequently, PC games written using disk operating system (DOS) for optical disc drives are increasingly
being replaced by application programming interfaces (APIs) that provide an interface between the game and the devices’
operating systems.
PC gaming is typically at-home entertainment

But handheld gaming PCs are trying to make it portable
Source: CNN, Polygon
Mobile gaming
Mobile gaming refers to playing video games on mobile devices like smartphones and tablets. The most important aspects
of mobile gaming are the processors and displays, connectivity via telecom networks and cloud services, and LiveOps.
Most processors in smartphones and tablets are specially designed systems on a chip (SoCs). An SoC is a microchip that
contains all the computing components required for the device on a single integrated circuit, including a GPU, a CPU,
system memory, and input/output (I/O) connectivity. The CPU determines the speed at which the device performs when
a game is played, while the GPU determines the speed at which the graphics are rendered. The clarity of graphics on a
mobile device depend on the display’s resolution (the number of distinct pixels a display accommodates) and refresh rate
(count of how many times the screen updates per second).
Mobile gaming publishers rely on telecom operators to provide internet connectivity and Big Tech to distribute games
via app stores. They also need cloud and edge infrastructure services providers (e.g., Amazon Web Services and Microsoft
Azure) to deploy game content closer to users, reducing latency and improving the quality of the experience.
LiveOps is a set of practices that modify a game following its launch. Game developers use LiveOps to get insights into
the performance of games, understand consumer behavioral trends, and implement strategies to add users and generate
revenue. LiveOps helps them focus on user acquisition, engagement, monetization, marketing, and troubleshooting.

Two main types of connected devices are used in mobile gaming

Smartphones (e.g., iPhone 13 Pro Max, Galaxy S22 Ultra) and tablets (e.g., iPad Pro and Galaxy Tab S8+)
Source: TechRadar, Gadget360
See Mobile Gaming.
Cloud gaming
GlobalData defines cloud gaming as a technology that allows video games to be streamed directly from the cloud and
played using any device with a display panel and an internet connection.
Rather than playing a game directly on a games console or a PC, games can also be played in cloud servers and streamed
directly from the cloud to any connected device. Cloud gaming uses streaming technology, similar to that used by a video
streaming service like Netflix, to deliver server-processed content to users. Servers process and store the game and
stream it to the user over an internet connection. Unlike Netflix, which offers one-directional video content for users to
consume, cloud gaming platforms offer two-directional, interactive content. The user’s controller sends the gameplay
inputs to the server.
There are two main approaches to cloud gaming, as described in Nokia Bell Labs Consulting’s ‘5G and Cloud Gaming’
white paper:
▪ Video streaming: This approach processes the game logic and graphics in the cloud, and a video stream is sent to
the user’s device. It minimizes the need for a powerful local GPU, which allows the service to be accessed on a wide
range of devices. However, it requires significant internet bandwidth to stream high-quality video to the device. Most
cloud gaming services use this approach, including Google Stadia, Nvidia GeForce Now, and Microsoft Xbox Cloud
Gaming.
▪ Command streaming: Here, the game logic and graphics are processed in the cloud, following which the graphics
instructions are sent to the user’s device, where the local GPU converts them into playable content. Unlike video
streaming, the cloud gaming server sends instructions to render the scene on the device. With a part of the game
using the device’s GPU, the instructions transmitted from the cloud are lightweight compared to a video stream. This
reduces the internet bandwidth requirements, but the quality of the graphics varies based on the capabilities of the
device's GPU.

There are two approaches to cloud gaming

Video streaming uses server-based compute and graphic power to return a video stream of the game to the user, while
command streaming uses the device’s GPU and returns video rendering instructions of the game to the user
Source: Nokia Bell Labs
See Cloud Gaming.
Esports
Esports are organized multiplayer video game competitions, typically involving professional players. Although organized
video game competitions have been part of the gaming industry for several decades, the trend of professional gaming
did not emerge until the late 2000s. Game developers and publishers now design game titles specifically for esports, and
events are watched by nearly half a billion people worldwide.
Esports tournaments are built around specific games, with a defined set of rules for the participating teams and players
to follow. These tournaments run on local area networks (LAN), with high bandwidth cables, Wi-Fi, or 5G networks
connecting the gaming devices. The games are displayed on large screens at the venue, and events are also broadcast
live on TV and online platforms for viewers at home to enjoy.
Esports can be watched in a stadium or online

Thousands of people watch esports in stadiums, while millions watch on streaming platforms like Twitch and YouTube
Source: Panaynews, Panda Security
See Esports.

Trends
The main trends shaping the video games theme over the next 12 to 24 months are shown below. We classify these
trends into three categories: technology trends, macroeconomic trends, and regulatory trends.
Technology trends
The table below highlights the key technology trends impacting the video games theme.
Trend What’s happening?
Metaverse Gaming is an ideal starting point for the metaverse. The metaverse involves communities built
on engaging content. The same factors are driving video games to become a $450 billion-plus
industry by 2030. Epic Games, Roblox, and Niantic are leading metaverse development on the
back of their massively popular games and global user communities. Microsoft’s bid to acquire
Activision Blizzard for $68.7 billion will help it obtain the communities and content to create
metaverse experiences. Blockchain-based games, like The Sandbox and Axie Infinity, are also
fueling metaverse development.
According to EY’s What’s possible for the gaming industry in the next dimension? report, 97%
of C-suite executives in the gaming industry believe gaming is at the center of the metaverse.
However, only half of the respondents said they understood the metaverse and how they
would participate in it. Some 26% said they understood it but were unsure how to participate,
and 24% said they understood the metaverse but were unaware of the details of how it works.
These results suggest that gaming companies are interested in the metaverse, but many have
yet to develop roadmaps to benefit from this theme.
See The Metaverse.
Cloud gaming Cloud gaming – which involves hosting games in the cloud and streaming them to connected
devices – will fundamentally change the video games industry over the next 10 years, just as
video and audio streaming has reshaped the music, film, and TV industries. But the market is
at a very early stage. Cloud gaming currently accounts for just 1% of global video games
revenue, rising to 6% by 2030. However, competition is intensifying, drawing in tech giants
(including Sony, Google, Tencent, Microsoft, Nvidia, Meta, and Amazon) and telcos (like
Deutsche Telekom, Sunrise, KT, and China Mobile). Game publishers like Ubisoft and
Electronic Arts have also formed partnerships with service providers to increase their
prominence in this developing market. Several cloud gaming providers and telcos are
experimenting with 5G in specific geographical locations to improve service quality and
experience until 5G becomes widespread. GlobalData estimates that the cloud gaming user
base will grow to 41 million in 2022, up 71% from 24 million in 2021. The popularity of mobile
gaming will make smartphones the primary cloud gaming platform over the next three years.
See Cloud Gaming.
Mobile gaming Mobile gaming is already bigger than the console and PC gaming markets combined,
contributing nearly 57% of global video games revenue in 2021. The growing maturity of
streaming (supported by 5G), cloud gaming services, and mobile esports—combined with the
fact that mobile platforms are close to technical parity with PCs and consoles—means most
gamers will embrace mobile gaming in the next few years. That said, mobile gaming expertise
is a must-have for all game companies. Due to its popularity and lucrative revenue
opportunities, traditional console and PC game publishers like Activision Blizzard and
Electronic Arts are increasingly focused on mobile gaming. They compete with the likes of
Tencent, Sea, and Perfect World, which primarily focus on mobile gaming. The increased
availability of 5G networks in the coming years will drive more users towards mobile gaming,
especially multiplayer titles. This, in turn, will boost the growth of mobile esports.
See Mobile Gaming.

Esports Most esports are played on PCs, as these devices offer convenient control and customization.
However, mobile esports will take off dramatically over the next three years. Free-to-play
games such as Player Unknown’s Battlegrounds (PUBG) Mobile, Clash Royale, Vainglory, Arena
of Valor (Honor of Kings in China), Garena Free Fire, and Mobile Legends are spearheading the
mobile esports revolution. Console-based esports remain limited to titles such as Call of Duty
(CoD), FIFA, Super Smash Bros, and Halo.
Activision Blizzard, Valve, Tencent (Riot Games), Epic Games (40% stake owned by Tencent),
Electronic Arts, Sea, and Krafton dominate esports today, boasting successful titles and
massive user communities. Over the next two years, these companies will exploit the loyal
followings built around existing games to position new titles in the market. Game publishers
such as Activision Blizzard, Valve, and Riot Games have pioneered first-party esports events to
improve the revenue potential of their games and establish loyal user communities. Sony,
which has been slow to explore esports, is also investigating this field. In addition to launching
a gaming PC range in June 2022, Sony acquired esports tournament platforms Repeat (in July
2022) and EVO (in March 2021).
Game publishers, device makers, and brands from different sectors are increasingly investing
in esports to attract those young consumers, especially Generation Z, which are typically
difficult to reach via traditional advertising channels. This trend will grow in the coming years
as esports enables investors to attract non-gamers into their ecosystems via video games.
See Esports.
Augmented reality AR gaming was worth $6.5 billion in 2021 and represented around 76% of annual AR revenues,
according to GlobalData forecasts. Undoubtedly, gaming is one of the most fertile grounds for
AR, but it has yet to establish itself in the mainstream. However, game publishers are
increasingly investing in AR games. In 2020, Niantic updated Pokémon Go and Harry Potter:
Wizards Unite to support at-home gaming in response to COVID-19 lockdowns. In March 2021,
Square Enix announced that its subsidiary Taito was developing a mobile AR version of the
classic arcade title Space Invaders. In June 2022, Niantic collaborated with the National
Basketball Association (NBA) to launch NBA All-World, an AR-based mobile game. Many
consumer-facing brands, including Cadbury, Converse, Disney, Sephora, and Puma, have also
used AR games in their marketing campaigns to engage with users.
However, AR games like Pokémon Go still lag some way behind non-AR mobile games like
Candy Crush Saga and Clash of Clans in user numbers and revenues. While the development
of simultaneous localization and mapping (SLAM) and location anchors promises new
experiences in AR games, AR needs to mature before it can support hardcore games.
See Augmented Reality.
Cybersecurity Gaming is increasingly digital, which, by default, attracts hackers. The hackers install malware,
place malicious adverts, steal virtual goods, and carry out distributed denial of service (DoS)
attacks to access user data and money. According to Atlas VPN, gaming-related undesirable
software, such as malware, adware, and spyware, infected more than 303,000 PCs between
July 2020 and June 2021. In mobile games, 50,000 users attempted to download malicious
files disguised as popular games like Minecraft and PUBG Mobile during the same period.
According to the aforementioned EY survey, 47% of gaming industry executives cited
mitigating cyber risks as a key challenge in 2021, while 58% believe it will be a problem by
2024. Some gaming companies are taking steps to mitigate cyber risks, including hiring people
with cybersecurity skills (47%) and partnering with cybersecurity firms (39%). However, the
growing popularity of gaming and its pivotal role in the developing metaverse will demand
more stringent cybersecurity measures by gaming companies in the coming years.
See Cybersecurity.
Source: GlobalData

Macroeconomic trends
The table below highlights the key macroeconomic trends impacting the video games theme.
Free-to-play with Free-to-play is a business model where games are available for free to users, but access to
premium content premium content requires microtransactions, known as in-app payments. In 2011, revenues
(freemium) from free-to-play, or freemium, mobile games overtook premium games on Apple’s App Store.
The top-grossing mobile games in 2021—including PUBG Mobile, Honor of Kings, Genshin
Impact, Roblox, Coin Master, Pokémon Go, Candy Crush Saga, and Garena Free Fire—are all
free-to-play. These games help publishers attract millions of users, develop new distribution
channels, and generate revenues via in-app payments. For example, Tencent released PUBG
Mobile in February 2018. By March 2021, the title had been downloaded more than one billion
times, become a top esports title, and generated over $8 billion in revenues through in-app
payments (according to SensorTower). Traditional game publishers such as Activision Blizzard,
Electronics Arts, and Tencent have also adopted the freemium model for their PC and mobile
games. This trend will continue in the foreseeable future as publishers aim to maximize the
monetization potential of their intellectual property (IP).
Play-to-earn Play-to-earn is a revenue model where blockchain-based games reward players with either
cryptocurrencies or non-fungible tokens (NFTs). The rewards could be exchanged for fiat
money on the gaming platform and cryptocurrency marketplaces. According to DappRadar
and Blockchain Game Alliance, blockchain gaming attracted investment totaling $2.5 billion in
Q1 2022, compared to $4 billion in the whole of 2021, reflecting the gaming industry’s interest
in this space. This is attributable to the hype around the metaverse and Web3-focused start-
ups that aim to establish in-game economies.
The play-to-earn model is also an expansion of free-to-play, where games are accessible for
free, with a route for gamers to earn from games. Axie Infinity, Decentraland, Cryptokitties,
and DeFi Kingdoms are some of the most popular play-to-earn games today, with many more
emerging in the market. However, play-to-earn gaming is still in its infancy and restricted to
crypto-enthusiasts. Mass adoption of play-to-earn games is unlikely in the foreseeable future
due to concerns around the legality of cryptocurrencies and their platforms in several
countries, uncertain economic potential, and security issues. However, investments in this
model will continue in the coming years as Web3 platforms position games as money-making
services.
Semiconductor The ongoing semiconductor shortage is a concern for the video games industry. Microsoft,
shortage Sony, and Nintendo have struggled to supply consoles to the market for more than two years
as the COVID-19 pandemic disrupted semiconductor supply chains. VR headsets, PCs, and new
devices like Valve’s Steam Deck have also encountered production delays due to a shortage of
semiconductors, while the demand for gaming skyrocketed amid the pandemic.
While the semiconductor shortage is easing with the receding impact of the pandemic,
bringing a positive outlook for central processing units (CPUs) and graphic processing units
(GPUs), power management chips are still in short supply. This is because power management
chips are low margin; therefore, there is less investment in capacity, and tight supplies are
expected to last longer, causing delays for end devices.
It is unclear when the shortage will be over. In May 2022, Intel warned that the shortage of
semiconductors would likely last until 2024. It is also possible that the demand for gaming
devices could decline due to the looming threat of global recession in the second half of 2022.
See Supply Chain Disruption and AI Chips.

Social factors The gaming industry is rife with widespread toxicity, from company executives to consumers.
This includes discrimination, hate speech, and threats of violence. While companies like
Electronic Arts and Valve have taken steps to tackle these issues, the industry has faced several
high-profile lawsuits (e.g., those involving Riot Games, Activision Blizzard, and Ubisoft for
gender discrimination and harassment). The toxic culture impacts the safety of employees in
the gaming industry, especially women.
Both female gamers and female employees in the gaming industry have gone public with their
experiences of discrimination, causing social media protests against gaming companies. In
June 2021, #ActiBlizzWalkout trended on social media platforms as Activision Blizzard
employees walked out in protest against the company’s discriminatory practices. The hashtag
was used over 100,000 times on Twitter in under 24 hours, according to Twitter. In August
2021, Black streamer RekltRaven set up the #TwitchDoBetter hashtag on Twitter, calling out
Twitch for failing to protect its content creators. Subsequently, in September 2021, streamers
boycotted Twitch to protest its inaction over hate raids that primarily targeted marginalized
creators from ethnic minorities or the LGBTQIA community. Such incidents often impact the
revenue and reputation of companies. Indeed, Nasdaq reported that Activision Blizzard’s
share price fell more than 25% in the second half of 2021, primarily due to its sexual
misconduct lawsuit. This was prior to the acquisition bid from Microsoft.
See Sustainability – Social Factors.
Working conditions Concern over working conditions in the gaming industry is also growing. Many employees in
large gaming companies have described working as many as 20 hours a day without getting
paid overtime. This, along with inadequate diversity and representation policies, has fueled
calls for unionization. The International Game Developers Association’s Developer Satisfaction
Survey report, published in October 2021, had its highest number of respondents ever stating
that diversity was important, yet 74% said there was no equal treatment and opportunity for
everyone within the industry. Only 38% of respondents said their employer had a formal
complaint procedure for equality, diversity, and inclusion issues, and this lack of policies hurts
the industry.
GlobalData’s ESG framework includes human rights, diversity and inclusion, health and safety,
and community impact as key elements for social sustainability. Investors, regulators, activists,
advisory services, news media, and social media increasingly demand transparency and
accountability in all four areas of social sustainability. As gaming becomes increasingly
prominent as an industry, game developers and publishers must improve their social
performance or risk a backlash from customers and investors.
See GlobalData’s ESG Framework and ESG Strategy Survey 2021.
Source: GlobalData

Regulatory trends
The table below highlights the key regulatory trends impacting the video games theme.
Gambling In-app revenue models frequently attract regulatory scrutiny as they blur the gap between
gaming and gambling. In the past, several European regulators have penalized companies like
Electronic Arts for using loot boxes in games, although there has been little action in this area
since 2020. Nevertheless, gambling-related regulations will continue to be a disruptive threat
to gaming companies for the foreseeable future. All gaming companies risk being impacted by
upcoming regulations around in-app monetization and loot boxes. The likes of Playtech and
Big Fish Casino, which rely heavily on loot boxes and in-app purchases, will be the prime
targets for regulators.
Data privacy Gaming companies are increasingly coming under scrutiny from data privacy regulators for
holding incremental volumes of user data. Gaming companies rely on user data to study
consumer preferences and trends, which, in turn, helps them personalize and target
advertising. In the coming years, gaming companies will be increasingly forced to limit their
dependence on users’ data and explore the use of contextual data from games for their
content and revenue generation models. In addition, data privacy regulators in the EU, Japan,
and India are adopting an extraterritorial approach, forcing companies to process user data
locally, regardless of where the companies themselves are headquartered.
See Data Privacy.
Impact on minors All around the world, regulators are concerned about the social impact of video games,
especially on those aged under 18. Video games have often been accused of causing
behavioral changes in players. These concerns led Chinese regulators to freeze the approval
of new domestic online game licenses in March 2018 and limit playtime for minors in August
2021. Outside of China, several local governments (e.g., Kagawa Prefecture in Japan) and
games (e.g., Krafton’s Battlegrounds Mobile India) have limited gaming time for underaged
players. In addition, games including elements of self-harm (e.g., Blue Whale), violence (e.g.,
Manhunt 2), and vulgarity (e.g., Quantum Matrix) have been banned in many countries. While
gaming advocates describe video games as an expressive medium, governments worldwide
have taken steps to curb their negative impact on minors. Developers have been forced to re-
introduce censored versions or terminate the games entirely.
Source: GlobalData

Industry Analysis
Market size and growth forecasts
Worth $197 billion in 2021, the global gaming software industry will generate $470 billion in revenue by 2030, expanding
at a compound annual growth rate (CAGR) of 10% over the period, according to GlobalData forecasts.
The gaming software market will be worth $470 billion by 2030

It was worth $197 billion in 2021
Gaming software revenue, 2021 - 2030

500
450
400
Revenue ($B)
350
300
250
200
150
100
50
0
2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
Source: GlobalData
Note: The estimate excludes the sale of gaming hardware (PCs, consoles, smartphones, tablets, and VR headsets) and revenues from esports.
Mobile gaming accounted for 57% of video games revenue in 2021 and will continue to dominate the market over the
next decade, retaining a 58% share by 2030. Cloud gaming will be the fastest growing segment in the industry, expanding
from approximately $2 billion in 2021 to more than $30 billion by 2030 at a CAGR of 39%.
Mobile gaming accounts for the lion’s share of global gaming software revenue
Cloud gaming will account for 6% share of the industry revenue in 2030, up from less than 1% in 2021
Gaming software revenue by type, 2021 - 2030

300
250
200
Revenue ($B)
150
100
50
0
2021 2022 2025 2027 2030
Mobile gaming PC gaming Console gaming VR gaming Cloud gaming
Source: GlobalData

Mergers and acquisitions

Video games is a heavily contested industry that attracts big-ticket M&A deals every year. 2021 saw a record 52 video
games-related M&A deals, with the vast majority focused on mobile gaming. However, mobile gaming specialists such as
Krafton, Jam City, and Tencent also acquired companies to improve their PC and console gaming capabilities. In addition,
Apple’s introduction of App Tracking Transparency (a feature of iOS that mandates that apps and games on the App Store
seek users’ permission to track their activity) triggered the purchase of some prominent mobile game advertising and
monetization platform providers. In 2021, video games-related M&A deals (valued at $50 million or more) surpassed $40
billion in value.
The first half of 2022 saw some of the biggest deals in the video games industry, including Microsoft’s $68.7 billion bid to
acquire Activision Blizzard, Take-Two Interactive’s $12.7 billion acquisition of Zynga, Sony’s $3.6 billion purchase of
Bungie, and Savvy Gaming’s $1 billion acquisition of ESL.
There were 52 video games-related M&A deals in 2021, up from 46 in 2020

H1 2022 saw some of the largest M&A transactions in the video games industry
Video games-related M&A deals by value and volume, 2017 - H1 2022

100 100
90 90
80 80
70 70
Deal value ($B)
Deal volume
60 60
50 50
40 40
30 30
20 20
10 10
0 0
2017 2018 2019 2020 2021 H1 2022
Deal value ($B) Deal volume
Source: GlobalData Deals Database
Note: All figures are based on the announced date of deals worth $50 million and above.
Video games will likely see robust M&A activity in the next five years. Key drivers will be the growing need for game
publishers to expand their user bases, improve user engagement, create content by incorporating technologies such as
AR, and diversify monetization strategies. The traditional demands to add games and users will also fuel M&A activity in
the video games market. In addition, non-gaming companies from sectors like advertising, retail, and tourism will also
expand into the video games market through acquisitions.
The growing emphasis of tech giants (e.g., Microsoft, Amazon, Tencent) and disruptors (e.g., ByteDance, miHoYo, Niantic)
on mobile gaming, cloud gaming, esports, AR, VR, and the metaverse will intensify M&A activity across the video games
industry.

The key M&A deals associated with the video games theme between January 2021 and June 2022 are listed below.
Date Acquirer Target Value Target company description

announced ($M)
May 2022 MGM Resorts LeoVegas 607 Mobile and online casino games developer
Jan 2022 Take-Two Interactive Zynga 12,700 Social and mobile games publisher
Jan 2022 Sony Bungie 3,600 PC and console games developer
Jan 2022 Savvy Gaming ESL Gaming 1,050 Esports organizer
Jan 2022 Microsoft Activision Blizzard 68,700 Mobile, PC, and console games developer
Nov 2021 Scopely GSN Games 1,000 Social casino and casual games publisher
Nov 2021 Kakao Games Lionheart Studio 383 Mobile and online games developer
Oct 2021 Krafton Unknown Worlds 750 PC and console games developer
Oct 2021 GN Store Nord SteelSeries 1,248 Gaming hardware and peripheral maker
Oct 2021 Esports Technologies Aspire Global 75 Online gaming platform provider
Sep 2021 Jam City* Ludia 165 Mobile, PC, and console games developer
Sep 2021 Stillfront Jawaker 205 Social card gaming network provider
Aug 2021 Playtika Reworks 400 Mobile games developer

Aug 2021 Zynga StarLark 525 Mobile games developer
Jul 2021 Tencent Sumo Digital 1,270 PC and console games developer
Jul 2021 Modern Times Group PlaySimple Games 360 Mobile-based word games developer
Jun 2021 Electronic Arts Playdemic 1,400 Mobile games developer
Jun 2021 Take-Two Interactive Nordeus 378 Mobile games developer
May 2021 Zynga Chartboost 250 Mobile game ad monetization specialist

Mar 2021 Ballys Gamesys 2,700 Online gaming platform provider
Mar 2021 ByteDance Moonton 4,000 Mobile games developer
Feb 2021 HP HyperX 425 Gaming hardware and peripheral maker

Feb 2021 Electronic Arts Glu Mobile 2,400 Mobile games developer
Feb 2021 Embracer Easybrain 765 Mobile games developer
Feb 2021 Saber Interactive Aspyr Media 450 Mobile, PC, and console games developer
Feb 2021 Embracer Gearbox 1,370 PC and console games developer
Feb 2021 Digital Turbine AdColony 400 Mobile game ad monetization specialist
Feb 2021 AppLovin Adjust 1,000 Mobile game ad monetization specialist
Jan 2021 Media and Games KingsIsle 210 Mobile and PC games developer
Source: GlobalData
*Part of a special purpose acquisition (SPAC) deal. Jam City merged with DPCM Capital and went public on the New York stock exchange.

Venture financing
The video games industry’s growing popularity and revenue potential have driven the emergence of numerous start-ups.
Promising start-ups are backed financially by venture capital (VC) companies and the investment arms of tech companies.
GlobalData’s deals database recorded 27 gaming-related venture financing deals valued at $50 million or more between
2017 and the end of H1 2022. Developers of mobile games and providers of social gaming platforms were the prime
funding targets between 2017 and 2020. Subsequently, metaverse platforms (e.g., Roblox and Rec Room) and blockchain
and NFT-based gaming platform providers (e.g., Immutable and Mythical) have attracted heavy backing from investors.
The deals database reveals that there were 17 venture financing deals worth over $50 million in 2021, which generated
$2.1 billion in combined value.
2021 was a record year for gaming-related venture financing deals

There were 17 venture financing transactions with a combined worth of more than $2.1 billion in 2021
Video games-related venture financing deals by value and volume, 2017 - H1 2022
2,500 18
16
2,000 14
Deal value ($M)
12
Deal volume
1,500
10
8
1,000
6
500 4
2
- 0
2017 2018 2019 2020 2021 H1 2022
Deal value ($M) Deal volume
Source: GlobalData Deals Database
Note: All figures are based on the announced date of deals worth $50 million and above.
Over the next three years, the video games industry will be influenced by the development of the metaverse and the
growth in the popularity of NFTs. As a result, many start-ups will emphasize in-game experiences, integrating non-gaming
entertainment such as music and live events. Others will use blockchain technologies to create in-game economies.
Companies that prove practical business models or successfully attract users to their platforms will gain backing from
technology companies and capital investors. Many promising start-ups will also become M&A targets as bigger companies
pursue entry or growth in the video games, metaverse, and NFT markets.

Below is a list of the key gaming-related venture financing deals worth over $50 million between 2017 and June 2022.
Date Company Funding Company description

announced raised ($M)
Mar 2022 Immutable 200 Blockchain and NFT-based gaming platform provider
Jan 2022 Dream Games 255 Mobile games developer
Jan 2022 Spyke Games 55 Mobile games developer
Dec 2021 Rec Room 145 VR gaming and social media platform
Nov 2021 Overwolf 75 Game development and monetization platform
provider
Nov 2021 Mythical 150 Blockchain-based gaming platform provider

Nov 2021 TSB Gaming 93 Community-focused gaming platform provider
Oct 2021 Homa Games 50 Mobile games developer
Oct 2021 Sky Mavis 152 Blockchain and NFT-based gaming platform provider
Sep 2021 Immutable 60 Blockchain and NFT-based gaming platform provider
Aug 2021 Npixel 86 Blockchain and NFT-based gaming platform provider
Jul 2021 Blockchain Game Partners 100 Blockchain and NFT-based gaming platform provider
Jul 2021 TickTock Skill Games 65 Social gaming platform provider

Jun 2021 Dream Games 155 Mobile games developer
Jun 2021 Mythical 75 Blockchain-based gaming platform provider
May 2021 Forte Labs 185 Blockchain and NFT-based gaming platform provider
Mar 2021 Rec Room 100 VR gaming and social media platform
Mar 2021 Overwolf 53 Game development and monetization platform
provider
Feb 2021 Dream Games 51 Mobile games developer
Jan 2021 Roblox 520 Online game platform and game engine provider
Sep 2020 Playco Global 100 Instant games developers for social gaming
Feb 2020 Roblox 150 Online game platform and game engine provider
Dec 2019 Wildlife Studios 60 Mobile games developer
May 2019 Unity 150 Game engine and monetization platform provider
Apr 2018 Discord 50 In-game instant messaging social platform provider
May 2017 Pie-Group 200 Entertainment company focused on VR and social

gaming
May 2017 Razer 100 Gaming devices and peripheral maker
Source: GlobalData.

Patent trends
Information from GlobalData’s Patent Analytics shows a flat trend in video game-related patent activity between 2017
and H1 2022. The number of video game-related patent filings increased from about 1,600 in 2017 to 1,800 in 2020. The
number of patents fell in 2021 (to about 1,670), and the downward trajectory is expected to continue in 2022. Video
game-related patent grants also exhibit a similar trend, growing from 1,000 in 2017 to about 1,230 in 2020 before
dropping to 1,100 in 2021. The slowdown in 2021 can be attributed to disruptions caused by the COVID-19 pandemic.
GlobalData expects patent activity to gather pace by 2023.
Video games is a mature market but is in a constant state of evolution due to advances in technologies. The development
of new gaming services (e.g., cloud gaming and esports), novel experiences (e.g., AR- and VR-based immersivity), and in-
game economies (e.g., NFTs and cryptocurrency-focused platforms) represent innovation opportunities. The growing
popularity of video games and consumer demand for new experiences and seamless access to games also drive
investment in innovation, which, in turn, fuels patent activity.
In terms of assignees, Sony is the leader in video game-related patents, having registered over 1,000 patent grants
between 2017 and H1 2022. It is followed by Nintendo (679), Tencent (411), and Konami (314).
Patent activity in video games is holding steady

Sony and Nintendo hold the most patent grants
Number of video games-related patent Companies with the most video games-related
applications, 2017 - H1 2022 patents, 2017 - H1 2022
1,200
3,500
1,000
3,000
800
2,500 600
2,000 400
1,500 200
1,000 0
500
0
2017 2018 2019 2020 2021 H1 2022
Filings Grants All publications
Source: GlobalData Patent Analytics

Timeline
Video games were developed in the late 1950s, but it was not until the early 1970s that their commercial potential was
realized with the introduction of Pong. Since then, the industry has continued to transform. In the 1980s, there was a
swift rise in demand for gaming consoles, while the 1990s saw the increasing maturity of gaming technologies and the
growing popularity of PC games, and the 2000s featured rising competition among tech companies and the advent of
social gaming. In the 2010s, the industry witnessed the rapid emergence of mobile gaming and esports.
The early part of the 2020s saw the emergence of cloud gaming, esports, and metaverse initiatives. As a community-
based industry, the future of video games is increasingly service-oriented, driven by disruptive technologies like cloud,
5G, AR, and VR.
The major milestones in the journey of the video games theme are set out in the timeline below.
The video games story

How did this theme get here, and where is it going?
1958 Physicist William Higinbotham created one of the first video games, a tennis simulator displayed on an oscilloscope.
1972 Atari introduced Pong, one of the earliest arcade video games.
1972 Stanford University held the first competitive gaming event, based on Spacewar.
1983 Nintendo introduced its first computer, the Famicom, in Japan.
1985 Nintendo released the Nintendo Entertainment System (NES) in the US.
1989 Nintendo introduced its Game Boy handheld gaming device.
1989 UK computer scientist Tim Berners-Lee invented the World Wide Web.
1990 The Super Nintendo Entertainment System (SNES), the follow-up to the NES, hit shelves in Japan.
1990 The first Nintendo World Championships were held in the US.
1993 Atari introduced the Jaguar, marketed as the first 64-bit games console.
1993 Investigations were conducted in the US Senate to regulate the development and marketing of violent games
1993 The IBM Simon personal digital assistant featured the first mobile game, Scramble.
1994 Sony initiated the commercial sale of the PlayStation in Japan, while Sega launched the Saturn.
1997 Nokia’s 6110 mobile phones came pre-installed with Snake, which gained widespread popularity.
1998 StarCraft, which helped to popularize esports in South Korea, was released.
1999 NTT DoCoMo’s i-mode, a mobile internet service, introduced downloadable mobile games.
2000 G-Cluster, a Finnish cloud gaming start-up, showcased the first cloud gaming technology.
2001 Microsoft entered the console market with the Xbox.
2003 Nokia launched the N-Gage smartphone, which combined mobile phone features with handheld gaming.
2004 Nintendo introduced the DS, a dual-screen handheld games console.
2004 Electronic Arts launched EA Mobile, a video game development studio, to focus on mobile games.
2005 Sony unveiled the PlayStation Portable (PSP), while Microsoft launched Xbox 360, the successor to the original Xbox.
2006 Nintendo released the Wii, and Sony launched the PlayStation 3.
2008 Apple launched the App Store, and Google introduced Android and the Play Store.
2010 OnLive launched the world’s first commercial cloud gaming service.
2011 Gaikai launched a cloud gaming service featuring games like Dead Space 2, The Sims 3, Spore, and Mass Effect 2.
2011 Revenues from free-to-play games overtook premium games in Apple’s App Store.
2012 The League of Legends: Season 2 World Championship offered a $1 million prize, attracting 8 million online viewers.
2012 King released Candy Crush Saga, one of the most successful free-to-play mobile games.
2012 SYBO’s Subway Surfers and Supercell’s Clash of Clans gained massive popularity among mobile gamers globally.
2013 Sony unveiled the PS4 and Microsoft launched the Xbox One.
2013 Nvidia launched cloud gaming service GRID (now GeForce Now) on its Shield Android TVs.

2013 The US government officially recognized League of Legends players as professional athletes.
2013 The League of Legends: Season 3 World Championship final was watched by more than 32 million people on Twitch.
2014 Sony announced the PlayStation Now cloud gaming service, based on technology acquired from Gaikai.
2014 Facebook acquired Oculus for $2 billion, and Amazon acquired Twitch for $970 million.
2015 EA demonstrated the growing importance of esports by establishing a Competitive Gaming Division.
2015 China lifted its 14-year ban on the manufacturing and retailing of video game consoles.
2015 Sony’s PlayStation Now opened for public access, and the company acquired OnLive.
2016 Facebook introduced its Oculus Rift VR headset, while HTC released the Vive.
2016 Microsoft acquired Twitch competitor Beam. The service was renamed Mixer in 2017.
2016 Activision Blizzard acquired King for $5.9 billion.
2016 Halti, a Tencent-led consortium, acquired Supercell for $8.6 billion due to the success of Clash of Clans.
2016 AR-based mobile game Pokémon Go was released, with its popularity making waves in the industry.
2016 Mobile gaming outstripped PC and console gaming by revenue.
2017 Nintendo released the Switch, a hybrid console that could be used in stationary and portable settings.
2017 Nvidia began testing the GRID service on PCs and allowed users to link their existing Steam libraries for content.
2017 Battle Royale games like Rules of Survival (NetEase) and Garena Free Fire (Sea) were released on smartphones.
2017 The online multiplayer game Honor of Kings was a megahit in China with about 200 million monthly active players.
2018 Google and Microsoft announced their cloud gaming initiatives, Project Stream and Project xCloud.
2018 Activision and Riot Games started franchise leagues around Overwatch and League of Legends.
2018 Facebook launched Facebook Gaming, or fb.gg, a streaming service focused on esports.
2018 Tencent released PUBG Mobile, one of the most downloaded mobile games of all time.
2019 Google launched its cloud-based gaming platform, Stadia.
2019 Tencent and NetEase began testing cloud gaming services in China.
2019 Facebook acquired PlayGiga, a Spanish cloud gaming start-up, for $78 million.
2020 Sony announced its PS Now service had surpassed 2.2 million subscribers since launch.
2020 Gaming and esports gained widespread popularity as traditional sports went on hold amid the COVID-19 pandemic.
2020 Microsoft launched Xbox Cloud Gaming (earlier Project xCloud), integrated with Xbox Game Pass Ultimate.
2020 Apple introduced rules to prevent cloud gaming services from marketing via the iOS App Store.
2020 Amazon announced Luna, a cloud gaming service similar to Google Stadia, and began offering access by invitation.
2020 Facebook launched a cloud gaming service integrated with its social media platform.
2020 Microsoft shut down Mixer and integrated the service with Facebook Gaming.
2021 Mobile gaming became a $100 billion industry, according to GlobalData forecasts.
2022 Microsoft made a $68.7 billion bid to acquire Activision Blizzard.
2022 Sony acquired Bungie for $3.6 billion as part of a strategy to develop live service games.
2022 China had over 430 million esports fans, more than the combined population of the US and UK.
2022 Blockchain-based play-to-earn (P2E) gaming gained popularity in several countries.
2025 The widespread availability of 5G networks will aid the growth of cloud gaming and esports.
2026 Sony and Microsoft will launch their next-generation consoles, potentially digital-only versions.
2027 Mobile gaming revenue will pass $200 billion, according to GlobalData forecasts.
2028 Cloud gaming will become popular worldwide, especially among mobile gamers.
2030 Global video games revenue will surpass $450 billion, according to GlobalData forecasts.
Source: GlobalData

Value Chain
GlobalData’s video games value chain is split into four layers: creation, monetization, distribution, and device.
The video games value chain

An overview
Creation layer Monetization layer Distribution layer Device layer
Game developers and Smartphones and

Ad networks Cloud services
publishers tablets
Telecom networks (inc.

Game engines Payment platforms Personal computers
5G)
App stores and online

Esports organizers Gaming consoles
platforms
Virtual reality (VR)

Brand sponsorship Social media
headsets
Smart TVs (inc. media

Media rights Streaming services streaming devices)
Retailers Peripherals
Source: GlobalData
In the creation layer, game developers and publishers develop video games using game engines. Before distributing,
game developers and publishers incorporate monetization channels with the help of ad networks and in-app payment
services. Other monetization streams, including revenues from esports organizers, sponsorship, and media rights, are
also included in this layer.
Video games are distributed to users’ devices via app stores, online platforms, and social media, facilitated by cloud
services and telecom networks. In addition, hard copies (i.e., compact disks and cartridges) of video games are sold at
brick-and-mortar retail stores.
Over the following pages, we look more closely at each layer in our video games value chain.

Creation layer
The creation layer forms the foundation of the video games ecosystem. The layer comprises two categories: game
developers and publishers and game engines.
Game developers and publishers

Game developers (the studios that create video games) and publishers (the companies that market video games) are the
most influential forces in the video games market. As well as developing and marketing games, they are responsible for
ensuring consumer data protection and privacy.
The video games market is heavily contested, with game companies of all sizes scrambling for a piece and Big Tech itching
to acquire more gaming content. In practice, most triple-A games (which have the highest development budgets and
levels of promotion) are released by video game companies that do most of the game development through in-house
development studios, with all the marketing handled by in-house publishing teams. Independent game developers
typically rely on striking deals with publishers, which tend to be the larger, integrated developers and publishers.
The growing popularity of video games is attracting non-gaming companies into the market. ByteDance, the developer
of the social media platform TikTok, has expanded into the gaming sector by acquiring mobile game makers such as
Ohayoo and Moonton. Video streaming platform Netflix is exploring opportunities for growth in mobile games, while
online advertiser AppLovin’s Lion Studios helps mobile game developers promote and publish their games.
Large game publishers, including Tencent, Activision Blizzard, Microsoft, Sony, and Embracer, dominate the market and
operate several in-house development studios. They compete with traditional publishers (e.g., Bandai Namco, Square
Enix) and disruptive players (e.g., Niantic, Roblox, miHoYo). While traditional publishers have established game portfolios,
disruptive companies use emerging technologies to make their mark. For example, Niantic uses AR to create location-
based games, while Roblox’s platform allows users to create and play games with fellow users.
The integration of emerging technologies (e.g., AI, cloud computing, AR, and VR) and concepts (e.g., the metaverse)
indicates a growing power shift in the video games market. Several game publishers are potential acquisition targets for
large technology companies, which see video games as a way to attract users and develop communities of loyal
consumers. Microsoft’s proposed $68.7 billion acquisition of Activision Blizzard has set a precedent for tech companies
to engage in big-ticket deals to propel their gaming and metaverse ambitions.
In addition, the rise of cloud gaming should increase the power of the tech giants, helping them become game publishers
in their own right in the coming years. Publishers like Activision Blizzard, Electronic Arts, and Take-Two Interactive risk
losing revenues as tech companies tap independent game developers to provide exclusive game titles for their services.

Creation layer: game developers and publishers
Creation layer Leaders Challengers
Activision Blizzard NetEase Bandai Namco Nexon

Game developers and Electronic Arts Nintendo ByteDance Niantic
publisherss
Embracer Sony CyberAgent Perfect World
Epic Games Take-Two Interactive Konami Roblox
Krafton Tencent miHoYo Sea (Garena)
Microsoft Ubisoft NCSoft Square Enix
Netmarble Vivendi (Gameloft)
& more
Source: GlobalData
Note: Activision Blizzard is in the process of being acquired by Microsoft.

Game engines
Game engines are the Holy Grail of the modern video games industry. From realistic in-game physics to high-definition
gaming landscapes, blockbuster titles fundamentally depend on game engines. Companies including Unity, which
accounts for the largest share of mobile games development, Epic Games (which owns Unreal Engine), Crytek (CryEngine),
and Chukong (Cocos2d) are the leading providers of game engines to developers.
Several publishers also own proprietary game engines. For example, Microsoft owns Bethesda’s Creation Engine,
Electronic Arts has Frostbite, Sony has PhyreEngine, and Ubisoft has Snowdrop. Most game developers rely on the leading
game engines to integrate high-quality graphics, in-game audio, animations, and memory management. These game
engines also enable developers to add content to their games and access in-game data in real time.
Game engines with platform-agnostic development environments reduce the time, effort, and cost of targeting multiple
platforms. Most developers work across PCs, consoles, and smartphones simultaneously to maximize returns. Over the
next three years, as the popularity of video games and gaming-oriented metaverses increase, Unity, Epic Games, and
Roblox will be M&A targets for the likes of Amazon, Tencent, Alibaba, Microsoft, Sony, Alphabet, and ByteDance due to
their impressive game engines.

Creation layer: game engines
Creation layer Leaders Challengers
Chukong Epic Games Activision Blizzard MonoGame

Game engines Crytek Unity Amazon Opera (YoYo Games)
Apple Roblox
Electronic Arts Scirra
Game Creators Simutronics
Gamua Sony
Godot Engine Ubisoft
Microsoft Valve
& more
Source: GlobalData

Monetization layer
Video games incorporate a variety of monetization models. These include advertisements, microtransactions,
subscriptions, brand sponsorship, and media rights. Game publishers often use a mix of the models mentioned above to
boost the monetization potential of their intellectual property (IP).
The video games monetization layer includes six types of participants:
▪ Ad networks: These online services link game publishers to advertisers that host in-game ads.
▪ Payment platforms: This category comprises mobile payment providers, card payment networks, and
cryptocurrency wallets.
▪ Esports organizers: These organizations host esports events and manage partnerships with venues, broadcasters,
and advertisers.
▪ Brand sponsorship: Brands sponsor or partner with games and esports to promote their offerings and engage with
consumers.
▪ Media rights: Streaming service providers (e.g., Twitch and YouTube) buy rights from esports organizations or game
publishers to broadcast tournaments live on their platforms.
Ad networks
Ad networks act as liaisons between advertisers and game app developers. Alphabet (Google AdMob), Meta (Facebook
Ads), Unity (Unity Ads), Apple (Apple Search Ads), Vungle, AppLovin, Tencent (Tencent Ads), and InMobi are some
prominent ad network providers for video games.
Most game developers and publishers work with multiple ad networks to maximize ad revenues. This necessitates the
use of ad mediation platforms, which transfer an in-game ad request from the game developer to various ad networks.
They, in turn, bid for the right to control the adverts that the user will see on screen. The online auction takes milliseconds
to complete, with the highest bidder’s ad routed into the game. Several ad networks offer ad mediation platforms.

Monetization layer: ad networks
Monetization layer Leaders Challengers
Alphabet (Google) Microsoft Affle (Appnext) Mistplay

Ad networks AppBrain Meta Chartboost Playwire
Apple Snap Fanbyte PWN Games
AppLovin Tencent LG Uplus Select Media
Digital Turbine Unity Media.net Start.io
InMobi Vungle Mobvista TapJoy
& more
Source: GlobalData

Payment platforms
Gamers favor simple, fast, and tailored in-game transactions. As a result, they are inclined towards open banking systems
that allow real-time fund transfers between their bank accounts and preferred wallets. Therefore, the payment platforms
segment comprises mobile payments, card payment networks, and cryptocurrency wallets. These services help users
make in-game purchases of virtual goods and NFTs such as skins, weapons, avatars, and gaming moments. Game
publishers typically work with local payment platforms in every country to:
▪ Offer recognizable and trusted payment solutions; and

▪ Adhere to domestic banking regulations.
Prominent mobile payment vendors for video games include Apple, Alphabet, Ant Group, Ingenico, PayPal, and Xsolla.
Leading card payment networks, like Visa, American Express, UnionPay, and Mastercard, also allow microtransactions in
online games. In addition, telcos allow gamers to make microtransactions without having to complete transactions during
gameplay. Instead, any spending is added to their mobile bills.
The use of virtual goods, facilitated by mobile payments and card payments, is widespread in video games, and NFTs are
an emerging trend. With the rise of blockchain-based games, several crypto-enthusiasts perceive that in-game items,
when converted into NFTs, can benefit in-game economies in the future. They believe NFTs can create ownership of
virtual items and allow users to transfer (or resell) them to fellow gamers. As NFTs are tied to cryptocurrencies, their
transactions are facilitated by cryptocurrency wallets.
Cryptocurrency wallets (e.g., Binance, Metamask, Ledger) partner with card and mobile payment services to help users
convert fiat currency into cryptocurrencies. While the crypto payments market is crowded with start-ups, telcos also have
opportunities in this space. In May 2022, gaming-focused carrier OnMobile added bitcoin payments on its platform
Onmo. Likewise, AT&T and GoldConnect allow users to pay bills with cryptocurrencies. More telcos will explore crypto
payments as cryptocurrencies and NFTs gain prominence in gaming in the coming years.

Monetization layer: payment platforms
Monetization Payment Leaders Challengers

layer platforms
Alphabet (Google) Ingenico JP Morgan (WePay) Razorpay
Mobile Ant Group PayPal Neteller Samsung Electronics
payments Apple Tencent One97 (Paytm) Skrill
Digital River Xsolla Paysafe Stripe
& more
American Express UnionPay Ant Group PayPal

Payment Card payment
platforms networks Mastercard Visa Apple One97 (Paytm)
& more
Binance Metamask AlphaWallet Gnosis Safe

Cryptocurrency Jaxx MyEtherWallet Atomic Portis.io
wallets
Ledger Trezor Bitski Temple
Exodus Trust Wallet
& more
Source: GlobalData

Esport organizers
There are two types of esports events: leagues and tournaments.
▪ Leagues are esports events that follow the franchise model of competition. Game developers and publishers typically
organize these events, selling permanent league spots to franchises to appear in the competition every year. For
example, the League of Legends Championship Series (LCS) is organized by Riot Games.
▪ Tournaments are esports events that are independently organized by third-party organizers who have acquired the
relevant IP rights from game developers and publishers. For example, Intel Extreme Masters is a Counter-Strike
competition run by ESL with authorization from the IP holder, Valve. Tournaments are generally flexible on the
number of participating teams that are selected based on performance in qualifying rounds.
In both models, the organizer decides on partnerships with broadcasters and advertisers. Thus, game developers and
publishers organize events to maximize their IP revenue. Esports organizers generate revenues from multiple channels.
Gaming analytics provider Newzoo identifies six esports revenue streams: brand sponsorship, media rights, publisher
fees, merchandise and tickets, digital (in-game items), and streaming. Sponsorship and media rights are the dominant
revenue channels. We will discuss the two streams separately in the following pages.
Digital and streaming are the fastest-growing revenue streams in esports, according to Newzoo. China and South Korea
will be key markets for the digital stream, as the growing popularity of mobile esports, coupled with the audience’s
support for specific teams and players, will boost in-game item sales. Likewise, the esports gold rush has sparked
competition among streaming platforms like Twitch, YouTube, and Facebook Gaming in North America and Europe, while
Douyu and Huya dominate in China. In addition, several country-specific streaming services provided by tech start-ups
and mainstream TV channels compete in specific markets.

Monetization layer: esports organizers
Activision Blizzard Sea (Garena) Axis Esports NODWIN Gaming

Esports organizers ByteDance (Moonton) Skyesports BeyondTheSummit One Esports
Gfinity Tencent Esports Engine RFRSH Entertainment
Modern Times Group Tencent (Riot Games) FaceIT StarLadder
PGL Valve Nexon Organizer Super League Gaming
& more
Source: GlobalData
Brand sponsorships
Brands from a wide range of sectors target the esports audience, which is predominantly made up of young men. This
demographic is typically tough for advertisers to reach through traditional channels. Technology and gaming companies
(often referred to as ‘endemic’ brands) are the primary sponsors of esports. However, the increasing involvement of
brands from other sectors (so-called non-endemic brands), such as beverages, retail, and consumer goods, is helping to
legitimize esports in the eyes of the wider world, as well as bringing in significant revenue.
Sponsorship from non-tech brands is helping esports teams open up new revenue channels (e.g., Cloud9 offers team-
branded apparel in partnership with Puma), while the involvement of globally recognized brands like Coca-Cola (the
official non-alcoholic beverage of Overwatch League) are examples of esports sponsorships.
Along with sponsorship revenue, endemic brands provide technical support to the esports industry. Hardware providers
like Alienware (a subsidiary of Dell) and Intel give the teams devices on which players can train and help organizers with
event infrastructure. Telcos offer connectivity and, in return, can use esports to promote their 5G offerings. Non-endemic

brands like Coca-Cola and Nike are making big pushes into the market. Nike’s multi-year deal with the League of Legends
Pro League in China is an example of how brands see esports as an important channel.
In H1 2022, 111 esports sponsorship deals worth approximately $129 million were signed, down from 194 deals worth a
combined $309 million in the same period of the previous year. The drop in deal value and volume is attributable to the
receding impact of the COVID-19 pandemic, during which esports witnessed a boom as other sporting events were put
on hold.
Less than 25% of the new deal value in H1 2022 came from endemic brands, while non-endemic brands claimed the
remaining 75%. Companies from cryptocurrency, financial services, automobiles, consumer electronics, and energy
drinks were the biggest spenders on esports sponsorships in H1 2022. The prominence of cryptocurrency companies is
no surprise, given esports’ digital nature and its growing user base. Investment from cryptocurrency companies in esports
will increase over the coming years as they attempt to add users to their platforms. These companies will develop esports-
oriented offerings (e.g., NFTs of teams and players) that users can purchase using cryptocurrencies. In addition, crypto
platforms (e.g., Bitcashier) and esports platform providers (e.g., Community Gaming) are also pursuing cryptocurrency-
based prize pools.
Furthermore, brands are also investing in video games via emerging metaverse platforms. For example, the gaming
platform Roblox became popular with brands during the COVID-19 pandemic. It attracted prominent names from sectors
like apparel (e.g., Nike), manufacturing (e.g., Hyundai Motors), entertainment (e.g., Spotify), and foodservice (e.g.,
Chipotle). Nike monetizes its Nikeland in Roblox by selling virtual merchandise to users. Similarly, the Wendyverse in
Meta's Horizon Worlds offers games and allows users to redeem in-game rewards at physical Wendy’s stores. As the
metaverse matures, more brands will introduce games, or gamified content, to engage with consumers.

Monetization layer: brand sponsorship
Adidas Nike AB InBev Mercedes-Benz

Brand sponsorship Coca-Cola Pepsico Allianz Procter & Gamble
Crypto.com Puma Audi Saudi Aramco
Fanatics Toyota Budweiser SoFi
Gatorade Verizon FTX State Farm Insurance
Hyundai Visa
Intel Wanda Group
& more
Source: GlobalData Sponsorship Brands Database
Media rights
The esports broadcasting gold rush has sparked competition among streaming platforms, TV channels, and social media
platforms. Exclusivity is becoming a trend in esports broadcasting, with companies competing to acquire esports content
for their platforms. YouTube’s multi-year live-streaming rights for the Overwatch League and Call of Duty League is a
notable example. In 2019, Chinese livestreaming platform Bilibili paid $113 million for the exclusive three-year media
rights to League of Legends international events, including League of Legends World Championship, Mid-Season
Invitational, and All-Star. However, before the League of Legends World Championship 2020, Bilibili sold the rights to
DouYu and Huya. Similarly, in May 2022, Kuaishou purchased the broadcasting rights to the ESL CS:GO event from Huya,
meaning the platforms can co-broadcast the event. Such deals are presumably aimed at expanding the user base.
Kuaishou, for instance, can expose its users to esports and attract Chinese esports viewers to the platform.
As selling exclusive esports media rights to peer streaming platforms is becoming a trend in China, reselling media rights
is already prevalent in traditional sports like football. This indicates that esports is maturing as a business opportunity,

and broadcasters are replicating traditional sports revenue models. More such monetization models are anticipated as
streaming platforms race to gain esports media rights in the future.

Monetization layer: media rights
Amazon Huya Bilibili Meta

Media rights Alphabet DouYu Comcast StarTimes Group
DAZN TV2
Kuaishou Walt Disney
& more
Source: GlobalData

Distribution layer
The distribution layer of the video games value chain includes the following participants:
▪ Cloud services: Includes cloud infrastructure providers such as Amazon Web Services (AWS), Google Cloud, and
Microsoft Azure, which offer cloud development platforms. In addition, this category covers content delivery
networks (CDNs), specialized network infrastructure that stores cached meta-content on edge servers and acts as a
gateway for bi-directional data transfer between the servers and users.
▪ Telecom networks: Includes internet service providers (ISPs), which are typically telecom operators.
▪ App stores and online platforms: Digital distribution platforms that allow users to download games and apps.
Examples include Valve’s Steam, Apple’s App Store, the Google Play Store, and Tencent’s My App Store.
▪ Social media: Includes social media networks like Facebook and messaging apps such as Tencent’s WeChat, which
offer free-to-play mobile games to their users.
▪ Streaming services: Includes streaming service providers (e.g., Twitch and YouTube) that buy media rights from
esports organizations or game publishers to broadcast tournaments live on their platforms. It also includes cloud
gaming services (e.g., Nvidia’s GeForce Now and Microsoft’s Xbox Cloud Gaming) that stream gameplay to users,
with their inputs sent back to the cloud gaming server via the network.
▪ Retailers: Includes brick-and-mortar retail stores (e.g., Walmart and GameStop) that sell physical copies of video
games and gaming hardware.
Cloud services
Cloud service providers allow game publishers to add thousands of virtual servers and petabytes of storage within
minutes. This allows game publishers to respond to high traffic levels, ensure the availability of games on app stores, and
add new features, content, and interfaces to games. AWS, Microsoft Azure, Google Cloud, and IBM are the leading cloud
services providers worldwide, except in China, where Alibaba is the outright leader. Rackspace, Oracle, Tencent, Huawei,
and Kingsoft, along with several telcos, offer their own cloud services.
Network latency can be challenging for video games hosted in the cloud, especially multiplayer games. Thus, game
publishers are trying to make the games available closer to the user via edge networks. CDNs help game publishers ensure
service quality, offload traffic on their main servers to edge networks, and deploy additional security against potential
denial of service (DoS) attacks. In addition, CDNs allow users to access games from app stores quickly and easily and enjoy
a lag-free experience when playing the game, irrespective of their distance from remote servers and the number of
concurrent users in the game. Google (with Google Hosted Libraries), Microsoft (with the Azure CDN), Amazon (with the
AWS-integrated Amazon CloudFront), Akamai, and F5 Networks are leaders in this segment.

Distribution layer: cloud services
Distribution layer Leaders Challengers
Akamai Amazon Baidu Kingsoft

Cloud services Alibaba F5 Networks Baishan Limelight
Alphabet (Google) Microsoft Cloudflare Rackspace
Fastly StackPath
Huawei Tencent
& more
Source: GlobalData

Telecom networks
Telecom networks are primarily the facilitators of internet connectivity for accessing and playing video games online.
With the lucrative revenue opportunities in mobile gaming, cloud gaming, and esports, most telecom carriers offer access
to gaming services. As video games become increasingly internet-oriented, telcos will be responsible for assuring the
quality of service (QoS) for games and gaming services.
Over the next two years, network latency will be a vital issue for emerging gaming services, including VR, AR, and cloud
gaming. Cloud gaming services, for example, will demand latencies in the range of 10 to 20 milliseconds (ms) or sub-10ms
to deliver high-definition visuals and smooth gameplay. Unfortunately, such ultra-low latency is beyond the capabilities
of existing 4G networks and is only guaranteed with 5G.

Distribution layer: telecom networks
A1 Telekom KT Bharti Airtel Reliance Jio

Telecom networks (inc.
AT&T SK Telecom China Telecom Swisscom
5G)
BT Group (EE) Telecom Italia China Unicom Telefónica
China Mobile Verizon LG Uplus Telstra
Deutsche Telekom Vodafone Ooredoo T-Mobile
& more
Source: GlobalData
5G
In 2022, as 5G roll-outs accelerate, the obvious play for telcos is to be connectivity partners for mobile gaming services
and publishers. 5G will help ensure the quality of service for mobile gaming, making multiplayer games more engaging
for users and more scalable for publishers. It will also fuel the development of new forms of gaming, such as cloud gaming,
mobile esports, and AR games on smartphones and tablets.
Mobile-based cloud gaming is becoming a prominent trend in the consumer market. Telcos are partnering with cloud
gaming services to showcase their 5G network capabilities and gain early traction in the market. For example, AT&T has
partnered with Xbox Cloud Gaming (Microsoft), and Verizon and BT Group are collaborating with Stadia (Google) to
demonstrate the low latency and high-bandwidth capabilities of their 5G networks. Asian players like KT, SK Telecom,
and China Mobile have adopted similar strategies. Telcos like Sunrise, Vodafone, and Deutsche Telekom have launched
mobile-only 5G cloud gaming services, partnering with Gamestream, Ubitus, and RemoteMyApp, respectively.
Telcos are also keen on the booming esports space, where mobile games are increasingly popular. In March 2022,
Telefónica held the 5G Wild Rift Cup event, in collaboration with Riot Games and Samsung, to showcase the quality and
capacity of its commercial 5G network. Early movers in 5G-powered esports connectivity, such as AT&T, Comcast,
Telefónica, SK Telecom, and China Unicom, could be potential beneficiaries in their home markets due to their growing
list of partnerships with teams and organizers.
5G’s low latency promises to deliver excellent experiences for AR applications, including gaming. The number of
5G-capable smartphones and tablets is increasing, and telcos are eager to make the most of their 5G networks. Many are
partnering with AR game developers to stay ahead of the competition. Deutsche Telekom, for instance, has partnered
with Niantic, the makers of Pokémon Go, to help the latter develop its AR cloud platform, the Real World Platform. The
platform aims to improve the game development process by addressing network latency barriers.

App stores and online platforms

App stores are platforms where users can download games onto their mobile devices. Google and Apple maintain a de
facto duopoly in this domain as most smartphones worldwide run on either Android or iOS. Google’s Android had an 80%
share of global active smartphone subscriptions in 2021, while Apple’s iOS held 18%, according to GlobalData estimates.
In April 2022, mobile games made up around 16% of apps available on the Google Play Store and 22% of apps on Apple’s
App Store, according to Business of Apps. The report also found that 2021 revenue from mobile games across the two
platforms was up 20% from the previous year. The App Store topped Google Play in terms of games revenue, which is
attributable to its popularity in countries such as the US, the UK, China, and Japan that have high average revenue per
user (ARPU). In contrast, Google Play Store is banned in China and popular in countries like Brazil, Spain, and India, where
users typically do not spend as much as users in the countries mentioned above. Simultaneously, several other app stores
compete for market share, including Amazon’s Appstore and Samsung’s Galaxy Store. However, their growth potential is
restricted by Apple and Google’s global dominance.
In China, the largest market for mobile gaming, the Google Play Store is banned due to the country's internet censorship
infrastructure that restricts publishing and accessing online content without the necessary approval. The infrastructure,
dubbed ‘The Great Firewall of China,’ is a mix of regulations and technologies that the government enforces to regulate
the internet within its geographical borders. However, the country hosts over 400 third-party Android-based
marketplaces that offer games. With its MyApp store, Tencent is the leader in the Chinese app store market, followed by
Huawei and Oppo.
Valve’s Steam is the largest and most popular online game distribution platform, according to gaming statistics for 2021.
The PC-focused platform reportedly has over 30,000 games available for download in its library. 47% of game developers
sell their games on Steam, according to the State of the Game Industry report published by the Game Developers
Conference. Challenging Valve with their own distribution platforms are Epic Games, Ubisoft, Microsoft, Sony, and
Electronic Arts.
Gaming giants are also experimenting with new distribution channels to increase their visibility among users and expand
revenue opportunities. For example, in April 2021, Ubisoft launched Ubisoft Nano, a multi-channel initiative to distribute
its IP across platforms such as mobile, PCs, social media, and more. Likewise, Sony’s console game MLB The Show 21 is
available on its rival Microsoft’s Xbox Game Pass, accessible on consoles and PCs. Several PlayStation titles can be
streamed on Xbox via Rainway, a peer-to-peer game streaming service. While console manufacturers—Nintendo,
Microsoft, and Sony—offer their own distribution platforms, further integration will allow other developers to reach a
massive user base worldwide.
In addition, cloud gaming services like Nvidia’s GeForce and Meta’s Facebook Cloud Games allow developers to stream
their games to users’ devices regardless of hardware specification, ultimately improving distribution. Meanwhile, at the
niche VR level, Meta and HTC are scrambling to add gaming content.

Distribution layer: app stores and online platforms
Alphabet (Google) Microsoft Amazon Hago

App stores and online
Apple Nintendo Baidu Itch.io
platforms
BBK Electronics (Oppo) Sony CD Projekt (GOG) Meta
Electronic Arts Tencent Crazy Games Qihoo 360
Epic Games Ubisoft GamersGate Samsung Electronics
Huawei Valve HTC Xiaomi
& more
Source: GlobalData

Social media
Gaming services on social platforms allow users access to download-free games. Instant Games, Snap Games, and Mini
Games are gaming services integrated into Facebook, Snapchat, and WeChat, respectively, and are accessible on mobile
devices. The games operate as web pages within the primary social media app, allowing users to access them without
switching to other apps. Users can also interact with fellow gamers, join and create gaming communities, share game
sessions with friends, and follow popular gamers to keep up with the latest trends.
Meta, Snap, and Tencent are leaders in social media. They offer developers the ability to distribute games to millions of
users via their social media networks and messaging apps. Tencent’s WeChat Mini Games reportedly has over 500 million
monthly active users, more than a third of the 1.3 billion WeChat users. According to Meta, which boasts more than 2.9
billion monthly active users, Instant Games had over 350 million monthly active gamers in August 2020. According to
Snap, around 300 million Snapchat users have played with Snap Games since 2019. It also claims that about 30 million
'Snapchatters' play games monthly within the app.
These stats reflect the popularity of mobile games among users of social platforms. It also indicates consumer interest in
online, download-free mobile gaming options that combine social media and gaming. Following the trend, social media
companies like Roblox and Sina (which owns Weibo) and messaging app providers such as Kakao (KakaoTalk), Rakuten
(Viber), and Plato Team (Plato) are also active in this segment. In partnership with developers, they are expanding the
games libraries on their social platforms to attract users.
Furthermore, streaming services (e.g., Twitch), instant messaging services (e.g., Discord), and distribution platforms (e.g.,
Steam) are also prominent in the social media space. Gamers use these platforms to research, keep up with the latest
trends, follow celebrities, and connect with fellow gamers. Social media is the perfect channel to advertise gaming and
esports events. For example, YouTube monetizes game streams via advertisements, while Twitch has partnered with
MVPindex for AI-driven data analytics to monetize game streams on its platform.
GlobalData anticipates further convergence of streaming services and social media platforms in the coming years.
Streaming services will use instant messaging to facilitate interaction among viewers and players, as well as among
esports players on the same team. Distribution platforms will attempt to build communities by integrating instant
messaging, enabling communication among users. Simultaneously, social media firms will try to push deeper into gaming,
especially in segments like casual games, VR and AR, esports, and cloud gaming.

Distribution layer: social media
Alphabet (Google) Roblox GamingBuddy Plato Team

Social media Amazon Snap Kakao Rakuten (Viber)
Discord Tencent Line Sina
Meta Valve MediaLab AI (Kik) Telegram
& more
Source: GlobalData

Streaming services
Streaming services can be split into two categories: video game streaming and cloud gaming.
Video game streaming

Video game streaming includes esports and live game session streaming. In 2021, streaming fans watched an average of
653 million hours of video game live streams each week on platforms like Twitch, YouTube, and Facebook Gaming,
according to Stream Hatchet. Video game streaming watch time grew 21% year-on-year, according to Stream Hatchet’s
Video Game Streaming Trends Report 2021. Although not as significant as the 81% growth achieved in 2020, global video
game streaming watch time continues to grow strongly.
Amazon’s Twitch controls the lion's share of the esports streaming market. Total viewership hours on Twitch grew by
31% in 2021, up six billion hours from the previous year. Contesting the second spot are Google’s YouTube and Meta’s
Facebook Gaming. Stream Hatchet’s data reveals that YouTube was second behind Twitch in the first half of 2021 by total
hours watched but was outpaced by Facebook Gaming in the second half. However, in August 2022, Meta announced it
would discontinue the Facebook Gaming app on iOS and Android from October 2022. While the service will be integrated
into the gaming feature in the main Facebook app, the move reflects Meta’s inability to challenge YouTube in the mobile
game streaming space.
Twitch has become the preferred platform for gamers in North and South America, Western Europe, Australia, and Sub-
Saharan and Southern Africa. On the other hand, YouTube has the lead in the Asian region at the time of writing.
The competition will intensify as Twitch and YouTube try to poach influential streamers. They will also scramble for
exclusive media rights to leagues and tournaments. The Chinese firms, especially DouYu and Huya (both partially owned
by Tencent), will look to expand in North America and Europe but are expected to face restrictions on national security
grounds. Although DouYu and Huya jointly command over 70% of the video game streaming market in China, they face
growing competition from Bilibili and Kuaishou. Other notable video game streaming platforms in the Asian region
include Afreeca.tv (South Korea), Naver.tv (South Korea), Trovo (Japan), and Booyah (owned by Singapore-based Sea).
Cloud gaming
Despite having the potential to fundamentally disrupt the gaming sector, cloud gaming is a niche market within the
massive video games industry as companies have yet to identify the best approach. By eliminating the need for a specific
gaming device, cloud gaming aims to attract non-gamers. To achieve this, it must focus on trends such as multiplayer
gaming and the integration of social media features, and it must make efforts to convert casual consumers into active
participants. This will help cloud gaming platforms add value for customers. For now, the industry is awaiting the
widespread availability of 5G, which will offer the internet speed, network latency, and server availability required for a
high-quality experience.
Most cloud gaming services will adopt either a Netflix-style subscription model focused on exclusive games or a YouTube-
like ad-based model based on third-party games and user-generated content. Google, Microsoft, Sony, and Nvidia are
banking on subscriptions. Microsoft, Sony, and Tencent are well-positioned thanks to their massive libraries of exclusive
games. Providers of subscription-based cloud gaming services that lack exclusive games will struggle to compete.
Free cloud gaming services, such as the one offered by Meta, and hourly-payment platforms, like those developed by
Loudplay and Paperspace, could attract more users than the likes of Google Stadia if they offer popular games such as
League of Legends and Fortnite. These freemium games will help cloud gaming providers to add advertisements as a
revenue stream. However, revenue derived from in-game microtransactions will typically go to the game publishers,
while the cloud gaming platform provider can only benefit from subscriptions. Cloud gaming providers reliant on third-
party games will increasingly face this challenge as publishers control their IP to maximize profits.
A trend of white-label cloud gaming platforms is emerging. White-labeling refers to a service offered by a company that
other companies can rebrand to market as their own. Google has white-labeled Stadia, meaning there will be new cloud
gaming providers in the market in 2022. AT&T has already adopted Stadia, and more, including start-ups, will follow suit.
Intel bolstered its cloud gaming capabilities by acquiring RemoteMyApp in November 2021. It will use RemoteMyApp’s

streaming technology to offer customized cloud gaming solutions to businesses, challenging Google. Intel will also
compete with Nvidia around data centers, chips, and cloud gaming services.
Amid the rising competition, Apple is the only Big Tech company that does not have a cloud gaming service at the time
of writing. Apple’s stringent iOS policies have limited cloud gaming’s early growth and damaged the company’s
competitive positioning in this theme. It has imposed restrictions on cloud gaming apps appearing on the App Store,
demanding that games on cloud gaming services must have their own store pages, and the developers must provide the
games’ metadata to Apple to market on the App Store. Apple also requires developers to use the iOS purchase function
and insists on reviewing games delivered via cloud gaming services. Cloud gaming providers are skeptical about giving
Apple access to their IP and services. They are, instead, using web browser-based solutions to offer the services on iOS.

Distribution layer: streaming services
Distribution Streaming Leaders Challengers

layer services
Amazon Meta Afreeca.tv Sea
Video game Alphabet (Google) DouYu Caffeine Theta.tv
streaming DLive Tencent (Huya) Discord Trovo
JOYY (Bigo) Valve (Steam.tv)
Naver.tv WePlay.tv
Streaming OpenRec.Tv Zhanqi.tv
services
& more
Alphabet (Google) Nvidia Amazon NetEase

Cloud gaming Blacknut Sony Blade Intel (RemoteMyApp)
Meta Tencent CareGame Paperspace
Microsoft Unity (Parsec) Cloudware Playkey
Deutsche Telekom Rainway
Electronic Arts Sunrise
Loudplay Swisscom
& more
Source: GlobalData
Retailers
The physical games market is in a terminal decline. It is being replaced by online marketplaces such as app stores, social
media platforms, and digital distribution services. Fueled by increased access to connectivity, gamers worldwide have
swiftly shifted to downloadable content (DLC) and online gaming sites, resulting in a steady decline in revenues for brick-
and-mortar game retailers.
Ecommerce companies (e.g., Amazon) and online platforms (e.g., Valve’s Steam) are in a strong position compared to
physical retailers due to the digitalization trend. However, the gaming industry will undergo a complete digital
transformation over the next five years, with a growing number of games made available exclusively via cloud gaming
platforms or app stores.
Despite the market slowdown, several physical retailers such as GameStop, Game Digital, Walmart, Best Buy, and Target
continue to sell physical games. On the bright side, these retailers are the go-to destinations for gaming hardware (e.g.,
PCs, consoles, and smartphones), peripherals, and physical copies of games, as they provide quick access. That said, the
push by ecommerce companies to deliver products on the same day or the next day threatens physical retailers’
competitive edge.

Device layer
We split the video games device layer into six broad categories:
▪ Smartphones and tablets: Allow users to access games via app stores and play games on the move. Gameplay inputs
are either provided via touchscreen displays or controllers.
▪ Personal computer (PCs): Includes laptops and desktops where games are played using either a mouse and keyboard
or controllers.
▪ Gaming consoles: Includes dedicated gaming devices that run games locally. Gameplay typically requires a
controller-based input mechanism, either connected externally or in-built.
▪ Virtual reality (VR) headsets: VR headsets completely cover the eyes of the user and transport them inside a game
for an immersive experience. Dedicated controllers are used to provide input to VR games.
▪ Smart TVs (including media streaming devices): Smart TVs and media streaming devices offer the ability to access
games on TVs via online platforms, controlled using a smartphone, tablet, PC, or gaming controller.
▪ Peripherals: Includes devices such as keyboards, mice, and audio headsets that aid input or output when playing a
game on a PC, smartphone, console, or smart TV.
Smartphones and tablets

Smartphones are the primary devices for mobile gaming. Leading smartphone and tablet makers are racing to dominate
the mobile gaming market. Apple and Samsung lead in both categories thanks to their devices’ high-end processors and
powerful random-access memory (RAM). For example, Samsung’s Galaxy S21-series smartphones, launched in January
2021, feature Qualcomm’s Snapdragon 888 5G chipset and boast 16GB RAM and an adaptive refresh rate suited for
mobile gaming. Samsung has also partnered with Unity to develop a feature called Adaptive Performance, which offers
improved graphics and faster gameplay while keeping the phone cooler. Apple’s iPhone 13, launched in September 2021,
features the A15 Bionic chip and 5G connectivity, which promises to offer a console-quality gaming experience.
Cheaper smartphones offered by Chinese companies such as BBK Electronics, Xiaomi, and Huawei also have a strong
foothold in the Asian and European markets. As these companies compete directly with Apple and Samsung, gaming is a
potential area of differentiation. For example, in May 2021, Xiaomi launched its first gaming smartphone, the Redmi K40
Gaming Edition. It features MediaTek’s Dimensity 1200 chipset and JBL speakers for running high-end games with
immersive sound effects. The likes of Black Shark (financially backed by Xiaomi, among others), Redmagic, and Nubia are
also designing gaming smartphones. They are increasingly focused on powerful processors, long-lasting batteries, cooling
systems, high-resolution displays, immersive audio, touch response, and custom controls.
Apple and Samsung are also leaders in the global tablet market. From a gaming perspective, they both offer large
portfolios of games via their app stores. While Amazon, Huawei, Microsoft, and Lenovo are active in the market, their
tablets generally offer fewer games on their proprietary app stores than the market-leading devices. In the coming years,
the rise of cloud gaming services on Android and Windows-based tablets could help these companies expand their market
shares. Apple’s iPad is vulnerable in the long run as the company has limited cloud gaming services on the App Store.

Device layer: smartphones and tablets
Device layer Leaders Challengers
Apple Huawei Alphabet (Google) Microsoft

Smartphones and tablets BBK Electronics (Oppo) Samsung Electronics Asus Nubia
BBK Electronics (Vivo) Xiaomi Black Shark Redmagic
Lenovo Razer
& more
Source: GlobalData

Personal computers
The State of the Game Industry 2022 report by the Game Developers Conference suggests that PCs are the most popular
platform for game developers in terms of current (63%) and upcoming (58%) games. At the consumption level, PCs are
preferred by many users due to the superior game control offered by a keyboard and mouse combination and the ability
to customize components. Thanks to these capabilities, the vast majority of esports are played on PCs.
With the growing popularity of esports and new PC-based games arriving, gaming PCs are likely to be the preferred choice
of esports players over the next three years, benefiting the likes of Dell, Asus, and HP. PC makers are partnering with
esports teams to promote their esports-compatible devices. Dell’s subsidiary Alienware, for example, has built a training
facility in California for Team Liquid to promote its Aurora gaming machines, while Asus provides high-refresh gaming
monitors and esports-specific compact desktops to Ninjas in Pyjamas. These activities will drive gaming PC sales, spurred
on by a host of niche brands, such as Razer and Corsair, which are prominent in the PC and accessories space.
PC gaming enjoyed a notable uptick in popularity during the pandemic, and the competitive landscape is increasingly
crowded. Sony, in July 2022, launched the Inzone-branded gaming monitors to cater to this market. With consumers,
developers, and esports organizers increasingly focusing on PCs, Sony is attempting to increase its market share. Likewise,
Apple is gradually positioning its Mac range, renowned for high performance, high-quality graphics, and the ability to
handle multiple tasks. However, Macs are expensive, and most developers prefer to use Windows computers as most PC
games are designed with Windows users in mind. Despite powerful devices, Apple has a long way to go to make a mark
in the PC gaming market.

Device layer: personal computers
Acer HP Apple MSI

Personal computers Asus Lenovo Corsair Razer
Dell Technologies Microsoft CyberPower Samsung Electronics
Maingear Sony
& more
Source: GlobalData
Gaming consoles
Gaming consoles come in two forms: home-based (e.g., Sony’s PS5, Microsoft’s Xbox Series X, and Series S) and handheld
(e.g., Nintendo’s Switch). The sale of gaming console hardware and games accounted for nearly 20% of total video game
revenue in 2021. The console makers have established strong positions for their devices in the market, despite facing a
shortage of chips and supply chain issues amid the COVID-19 pandemic.
Sony’s PS5 is dominant in the home-based consoles segment, having sold over 19.3 million units since its launch in
November 2020. Microsoft does not disclose Xbox Series X and Series S consoles sales but reportedly lags behind Sony.
In the handheld category, Nintendo is the undisputed leader, with 23 million Switch consoles sold between April 2021
and March 2022. The lifetime sales of the Switch, as of August 2022, stood at 111 million units since its launch in March
2017.
The State of the Game Industry 2022 report reveals that 43% of developers are interested in making games for the PS5,
with 39% interested in Nintendo Switch and 30% in Xbox Series X and Series S. Interestingly, 25% of developers preferred
mobile platforms (e.g., iOS and Android). These stats reflect that console gaming is far from becoming extinct, as
anticipated by several experts with the rise of mobile gaming and cloud gaming.

Also competing in the consoles market are Atari, Blaze, Playmaji, and Valve. Valve, the owner of Steam, is increasingly
focused on gaming hardware and released the Steam Deck—a portable, Linux-based handheld console—in February
2022. The Steam Deck allows users to play PC games on the move, but it primarily competes with the Nintendo Switch.
Although in its early days at the time of writing, the Steam Deck is unlikely is attract users beyond early adopters in the
coming months.

Device layer: gaming consoles
Microsoft Sony Analogue Panic

Gaming consoles Nintendo Atari Playmaji
Blaze TinyCircuits
GamePad Digital Valve
& more
Source: GlobalData
Virtual reality (VR) headsets

Gaming is the most fertile ground for VR headset makers. Sony sold five million units of its gaming-specific PSVR headsets
between October 2016 and January 2020 and is now working on a successor for a 2022 launch. Meta, HTC, and Valve are
also strong contenders in the VR gaming market, aiming to bring hardcore games to their headsets. On the other hand,
Nintendo focuses on casual games and targets children specifically with its Labo VR kit.
Despite the optimism of VR headset makers, VR gaming remains a small part of the total video games market in both unit
sales and revenues. For instance, Beat Saber is arguably the most popular VR game, having sold over four million copies
between May 2018 and February 2021. By comparison, PUBG Mobile (released in February 2018) exceeded one billion
downloads in March 2021. VR games cater to a niche audience, primarily early adopters, and hardcore VR gaming is yet
to emerge. That said, VR gaming arcades are gaining popularity in several countries, including China and the US, and HTC
is a leader in that space.

Device layer: VR headsets
ByteDance (Pico) HTC HP Nintendo

Virtual reality (VR) Meta Sony Huawei Valve
headsets
Lenovo Xiaomi
& more
Source: GlobalData
Smart TVs (including media streaming devices)

Streaming services are being integrated with smart TVs and media streaming devices. For example, in July 2022, Samsung
integrated the Samsung Gaming Hub into its 2022 line-up of smart TVs. The Gaming Hub supports cloud gaming services
such as Xbox Cloud Gaming, Nvidia GeForce Now, Google Stadia, and Utomik, with support for Amazon Luna to be rolled
out in the future. In addition, the hub supports video game streaming services such as YouTube and Twitch. Likewise,
Chinese smart TV maker TCL is also expanding into the video games market. In June 2022, it launched the TCL C635 in
India, which features a 144Hz variable refresh rate, the highest on any TV at the time of writing, making it ideal for gaming.

Cloud gaming services are also being integrated with media streaming services such as Chromecast (Google Stadia),
Nvidia Shield (Nvidia GeForce Now), and Fire TV (Amazon Luna). Microsoft is also reportedly working on a streaming
device to allow users access to the Xbox Cloud Gaming service on their TVs. Other media streaming services from Roku
and Xiaomi are expected to integrate cloud gaming in the long run, provided it represents a stable revenue stream.

Device layer: smart TVs (including media streaming devices)
Alphabet (Google) LG Acer TCL

Smart TVs (inc. media Amazon Samsung Electronics BBK Electronics Roku
streaming devices)
Apple Sony Hisense Vizio
Nvidia Xiaomi
& more
Source: GlobalData
Peripherals
The peripherals segment includes keyboards, mice, and audio headsets. Traditionally catering to PC and console gamers,
gaming peripheral manufacturers see new opportunities in the esports and mobile gaming markets. Sony, in July 2022,
launched Inzone-series wireless gaming headsets with 360-degree spatial sound and noise-canceling features to cater to
mobile and PC gamers. Sony, Logitech, Asus, HyperX (acquired by HP in June 2021), and Turtle Beach have also introduced
esports and multiplayer gaming-oriented peripherals.
In April 2022, esports organizer NODWIN Gaming, in partnership with Wings Lifestyle, launched gaming-specific
soundbars and smartwatches at competitive prices to target price-sensitive Indian customers. That said, the market for
gaming peripherals is increasingly crowded. GlobalData expects the larger and more established firms to maintain control
over their respective target groups and thus secure their positions.

Device layer: peripherals
Asus Razer Cooler Master Redragon

Peripherals Dell Technologies Sony Corsair Roccat
Logitech SteelSeries HP (HyperX) Sennheiser
Microsoft Turtle Beach Mad Catz Zowei
& more
Source: GlobalData

Companies
In this section, GlobalData highlights companies making their mark in the video games theme.
Company Country Competitive position in the video games theme
Activision Blizzard US Activision Blizzard is one of the biggest video game publishers in the world, with
massively popular games such as Call of Duty, World of Warcraft, Overwatch, and
Candy Crush Saga. It operates three business units—Activision Publishing,
Blizzard Entertainment, and King—that serve gamers across consoles, PCs, and
mobile devices. Its Major League Gaming (part of Blizzard Entertainment) is a
leading esports organizer that hosts the Overwatch League and Call of Duty
League. Traditionally a console and PC-focused game publisher, Activision is
increasingly focusing on mobile gaming, thanks to the success of Candy Crush
Saga and Call of Duty. The company plans to bring all its franchises to mobile
devices eventually. It also owns Battle.net, a proprietary online distribution and
digital rights management platform. Activision Blizzard is awaiting regulatory
approval of Microsoft’s $68.7 billion takeover bid at the time of writing.
Alphabet (parent US Thanks to Android, the most popular mobile operating system globally, Google
company of is a leading player in the video games market. Its gaming-related offerings
Google) include Play Pass (a subscription-based gaming service on Android devices),
Stadia (a cloud gaming service), Cloud Platform (a service that allows game
developers to store and distribute games from remote servers), and Ads,
AdSense, AdMob, and Analytics (services that allow game developers to
generate revenues through mobile advertising and derive customer insights).
Additionally, Google owns YouTube, a popular platform for streaming esports
content that competes directly with Amazon’s Twitch. YouTube holds multi-year
exclusive broadcasting rights for esports events like Call of Duty: Mobile League
and Overwatch League. Its breadth of offerings makes Google well-positioned in
the mobile gaming market.
Amazon US Amazon’s Twitch is a leader in esports streaming, with approximately 140 million
monthly active users. While Twitch faces competition from Google’s YouTube
and Meta’s Facebook Gaming, its 50,000-plus partners (successful streamers
with established audience bases) give it a strong foundation. Amazon has also
forayed into cloud gaming (with Luna; currently available in the US), game
engines (Lumberyard), and mobile app stores (Appstore). Having launched
successful in-house games (e.g., New World and Lost Ark), Amazon is also moving
into game publishing. In June 2022, it partnered with independent developer
Disruptive Games to publish the latter’s upcoming online multiplayer action-
adventure game. Despite this push, Amazon lags behind Microsoft and Sony due
to a lack of gaming hardware and a limited games portfolio. However, many
gaming companies worldwide use Amazon Web Services’ cloud offering.
Blacknut France Blacknut is creating a niche in the cloud gaming market, offering over 500
premium games. Its service is available in 45 countries across Europe, Asia, and
North America and enables gaming on PCs, mobiles, smart TVs, and browsers like
Chrome and Safari. In June 2022, Blacknut secured a strategic investment from
Square Enix to boost its R&D and games portfolio. Blacknut is expanding its
partner ecosystem, involving telcos (e.g., Telecom Italia, AIS, NOS, and M1),
game developers (e.g., Wired Production and HandyGames), and media
companies (e.g., Genba Digital and Partner TV). Blacknut is at the forefront of
cloud gaming and could potentially become an M&A target for larger technology
companies in the long run.

ByteDance China ByteDance entered the gaming market in 2019 and is fast becoming a disruptive
force. The company owns three game studios: Ohayoo (a specialist in hyper-
casual games), Nuverse, and PixDance (which both develop mid-core to hardcore
mobile titles). ByteDance is using M&As to build its games portfolio and mobile
esports offerings, which, in turn, helps it compete with Tencent and NetEase in
China. It acquired Moonton for $4 billion in March 2021 to cement its position in
the Chinese esports market and C4games the following month to develop mobile
games for the global market. In August 2021, it acquired Pico Interactive to enter
the VR gaming and metaverse markets. In 2022, ByteDance is expected to add
HTML games to TikTok, developed by Voodoo, Nitro Games, FRVR, Aim Lab, and
Lotum. ByteDance will continue to push into gaming, especially in China.
CareGame France CareGame is known for its mobile cloud gaming technology that allows users to
play high-end mobile games on both iOS and Android. CareGame claims that the
service is affordable on low budgets and accessible on low-end smartphones
with limited 4G connectivity.
The service is delivered as a turnkey white-label solution, distributed through
mobile operators and telecom service providers. CareGame provides the mobile
games, the cloud infrastructure, and the tech behind the cloud gaming service.
CareGame operates in 54 countries across Asia, Africa, the Middle East, South
America, Europe, and North America.
Its accessibility and unique business model adapted to local markets, coupled
with a catalog of 1,200-plus instantly accessible high-quality mobile games,
makes CareGame a disruptive player in the cloud gaming market. The expanding
geographical footprint will attract more partnerships in the future, which will
boost CareGame's portfolio and user base.
Electronic Arts US Electronic Arts (EA) is a global leader in the video games industry, with games
such as FIFA, Madden NFL, Apex Legends, Star Wars, Battlefield, The Sims, and
Need for Speed. In addition to distributing games via retail stores, EA maintains
a digital distribution channel, Origin. EA has also entered esports with FIFA Global
Series, Madden Championship Series, and Apex Legends Global Series.
Traditionally focused on PC and console games, EA is increasingly emphasizing
mobile games. In February 2021, it acquired Glu Mobile for $2.1 billion to add
MLB Tap Sports Baseball, Design Home, Disney Sorcerer’s Arena, and Kim
Kardashian: Hollywood to its portfolio. Later, in June 2021, it acquired Playdemic
Studios (the makers of Gourmet Ranch and Golf Clash) from Warner Bros.
Interactive to boost its mobile games library. In March 2022, EA ended its
partnership with FIFA and announced it would be renaming the iconic title EA
Sports FC in 2023. Subsequently, in August 2022, it announced a multi-year
agreement with the Spanish professional football competition LaLiga to become
its main sponsor from 2023. The deal includes title naming rights for all LaLiga
competitions, in-game integrations, broadcast highlights, and more. EA aims to
use the FIFA fanbase to ink new partnerships with European football
organizations, including Germany’s Bundesliga, in the future. These deals will
strengthen EA’s prominence in esports as traditional sporting and video games
increasingly overlap.
EA is a potential M&A target for the likes of Apple, Disney, Amazon, and Comcast.
Purchasing EA will instantly position the acquirer as a video game market leader
and allow it to use EA’s content, community, and technologies to build
metaverse experiences.

Epic Games US Tencent-backed Epic Games—the creator of Fortnite—has been a key force in
transforming video games into a service-based industry. Its mastery of freemium
games helped Fortnite generate $1 billion in revenues between its launch in
October 2017 and July 2018, all via microtransactions. Reportedly, Fortnite
generated $5.8 billion in revenue in 2021 and had over 350 million users globally.
The success of Fortnite is attributable to Epic’s Unreal Engine. The game engine
is strong in computer graphics, 3D visualization, AR, and VR—all essential for
immersive gaming. Epic is also a leader in esports and organizes the annual
Fortnite World Cup and seasonal Fortnite Champion Series.
The Epic Games Store is a PC games distribution platform that challenges Steam’s
revenue model. Steam charges a 30% commission from developers for games
sold on the platform, while Epic Games Store takes a 12% cut. In addition, Epic
claims to be more developer-friendly than Steam. Epic has also criticized and
attempted to bypass the 30% commission charged by Apple and Google on their
mobile app stores. At the time of writing, it is fighting a lawsuit against Apple in
the US following the removal of Fortnite from the App Store in June 2021.
Krafton South Korea Video games holding company Krafton was established in November 2018 by
Bluehole, the maker of PUBG. It is backed by Tencent, which holds a 13.5% stake
in Bluehole. The mobile version of PUBG, PUBG Mobile, was developed by
Tencent’s Lightspeed & Quantum Studios. Krafton has licensed it to Tencent for
development and marketing globally. Tencent also runs the Chinese version of
PUBG Mobile, Peacekeeper Elite. PUBG Mobile made over $8 billion in revenues
between March 2018 and March 2022 (according to SensorTower).
Despite the success of PUBG Mobile, Krafton is vulnerable to regulations. In
September 2020, India banned PUBG Mobile, citing data privacy concerns amid
geopolitical tensions with China. Consequently, Krafton took over the game’s
publishing from Tencent in India. In May 2021, it announced an India-exclusive
version, Battlegrounds Mobile India (BGMI), which recorded 100 million
downloads by July 2022. However, it was banned in July 2022 for undisclosed
reasons, causing a 9% dip in Krafton’s shares on the day of the announcement.
Meta (formerly US Meta’s offerings in the video games market include Instant Games (for HTML
Facebook) games), Facebook Gaming (live streaming), Facebook Cloud Gaming (cloud
gaming), and Quest headsets (VR games). It has partnered with game developers
(e.g., SoftGames, Fun Plus, and Miniclip) for Instant Games and acquired VR
gaming firms (e.g., Beat Games, Ready at Dawn, and BigBox VR) to strengthen its
position in the gaming sector. In October 2021, it announced a partnership with
VR studio Vertigo Games to bring five new games to its Quest headsets.
In June 2020, Facebook Gaming absorbed Microsoft’s Mixer, thereby improving
the volume of gaming content and increasing its audience. Subsequently, in
October 2020, Facebook announced a cloud gaming service for freemium games.
The service comes integrated into the official Facebook platform via the web or
an Android-based smartphone app and has no subscription plan at the time of
writing. The service is unavailable on iOS-based devices due to the App Store
restrictions imposed by Apple. As Meta focuses on the metaverse, it is expected
to emphasize immersive games using AR and VR technologies.

Microsoft US Microsoft is a dominant player in the video games market. It owns 23 game
studios that offer several popular titles, including Forza, Gears of War, Halo,
Minecraft, Microsoft Flight Simulator, and The Elder Scrolls. Its Xbox consoles are
very popular, competing directly with Sony’s PlayStation consoles. However,
Microsoft has a limited presence in mobile gaming outside of Minecraft, which it
owns following the acquisition of Mojang for $2.5 billion in 2014. Microsoft
discontinued several mobile games, including Age of Empires: Castle Siege (in
2019), Gears POP! (2021), and AR-based Minecraft Earth (2021), and shut down
its streaming platform Mixer in 2020.
Microsoft is active in cloud gaming through its huge games portfolio and global
cloud infrastructure. Its Xbox Cloud Gaming service was launched in September
2020, integrated with Xbox Game Pass Ultimate. In January 2022, Microsoft
made a $68.7 billion bid to acquire Activision Blizzard. Pending regulatory
approval, the acquisition will make Microsoft the third largest gaming company
by revenue after Tencent and Sony.
miHoYo (also China MiHoYo is a disruptive game developer renowned for Genshin Impact, an open-
known as world action role-playing game released in September 2020. Within 18 months,
HoYoverse) Genshin Impact generated more than $3 billion in revenues on mobile devices
(according to SensorTower). At the time of writing, it is working on a Switch
version of Genshin Impact. miHoYo’s other notable games include Houkai
Gakuen 2, Honkai Impact 3rd, and Tears of Themis.
Although miHoYo’s prime market is China, it is expanding overseas. In February
2022, it launched the global brand HoYoverse, which maintains offices in
Singapore, Canada, the US, Japan, and South Korea and focuses on developing
Triple-A games and a metaverse platform. Furthermore, in July 2022, it
partnered with 37 Interactive Entertainment (a game publisher) and GoerTek (an
acoustic component maker) to invest in startups developing advanced
manufacturing solutions, intelligent vehicles, AR and VR, and semiconductors.
However, in August 2022, miHoYo sued 37 Interactive in China for using images
from Genshin Impact without authorization.
NetEase China NetEase is a leading game developer and publisher in China, with notable games
such as the Westward Journey series, Heroes of Tang Dynasty Zero, and Onmyoji.
NetEase also partners with publishers such as Activision’s Blizzard
Entertainment, Microsoft’s Mojang, and Disney’s Marvel Entertainment to
operate the Chinese versions of their games. In May 2022, NetEase launched its
first US studio to develop first-party PC and console games. In October 2021, it
acquired Japanese game developer Grasshopper Manufacture from GungHo,
indicating an expanding focus on console games. NetEase also launched its cloud
gaming platform, NetEase Cloud Games, in December 2019. It partnered with
Huawei to establish a cloud-based gaming lab on 5G. The aim is to explore new
forms of game design, develop gaming experience evaluation standards, and
promote cloud-based games. NetEase also hosts esports events in China but lags
behind Tencent due to a lack of competitive titles.

Nintendo Japan Nintendo is one of the most successful companies in the video games market,
renowned for its consoles and iconic games. The company’s major franchises
include Mario, Donkey Kong, The Legend of Zelda, Pokémon, Kirby, Metroid, Fire
Emblem, Animal Crossing, Splatoon, Star Fox, and Super Smash Bros. It has sold
111 million Switch consoles and 863 million games since the device’s launch in
2017. Nintendo distributes its games in physical format (e.g., cartridges) and
online (via the Nintendo eShop and the Nintendo Network). It has a limited
presence in both the esports market, through Super Smash Bros, and VR gaming,
with the Labo VR kit.
Nintendo also views mobile gaming as a secondary market, meaning it does not
bring in as much revenue as consoles. However, Nintendo considers mobile
gaming a way to improve the exposure of its brand and franchises. In March
2021, it partnered with Niantic to create mobile AR games based on Nintendo IP,
similar to Pokémon Go, that will be licensed to Niantic. It has also partnered with
Tencent to market the Switch in China. Unlike its peers, Microsoft and Sony,
Nintendo does not have a cloud gaming service in the market. However, it allows
some graphics-heavy games (e.g., Hitman 3 and Kingdom Hearts 3) that the
Switch’s internal GPUs cannot support to be streamed from the cloud.
Roblox US Roblox is a key player in the video games market, with over 52 million average
daily active users, predominantly children below the age of 13. It offers an online,
free-to-play gaming platform that witnessed massive user growth during the
pandemic. The Roblox platform is positioned as an early metaverse, with brands
(including Nike, Gucci, and Hyundai Motors) creating gamified experiences. The
platform is powered by the Roblox engine that allows users to create games and
play games created by other users. Despite a generally positive consumer
response towards the platform, Roblox has been criticized for its
microtransaction- and marketing-oriented business model and its inability to
filter toxicity from the platform, which caters mainly to children. While Roblox
expands its developer community and builds games and metaverse experiences,
the engine will make it a prime M&A target in the coming years.
Sony Japan Sony is one of the largest video game companies in the world. It offers
PlayStation (PS) consoles, PSVR headsets, and Inzone-branded gaming PCs and
peripherals. Sony’s massive library of games, developed by its in-house studios,
caters to consoles, PCs, mobiles, and VR headsets. Sony is weak in mobile gaming
but plans to bring 20% of its popular PlayStation games to mobile by 2025. It,
however, dominates the console and PC gaming markets. In January 2022, Sony
acquired Bungie (the maker of Destiny and former maker of Microsoft’s Halo
franchise) for $3.6 billion to focus on live service games (online multiplayer
games that expand over time). It plans to invest 55% of PlayStation’s budget in
live service games by 2025 and aims to have 10 live service games by 2026.
Sony distributes games via physical retailers and its PlayStation online network.
The PlayStation network boasts over 100 million monthly active users. In
addition, Sony PS Now, launched in 2015, is the oldest cloud gaming service in
the market. Subscribers can stream games on PS4 and PS5 consoles and PCs. The
service also allows subscribers to play exclusive games from previous generation
consoles. In addition, Sony is making a steady push in the esports market, having
acquired EVO (March 2021) and Repeat.gg (July 2022). It has also acquired
minority stakes in Epic Games and Discord to enter the metaverse and expand
its live service games offering, respectively.

Tencent China Tencent is the largest company in the video gaming market by revenue. Its
dominant position is attributable to its stakes in leading game publishers like Riot
Games, Epic Games, Krafton, Activision Blizzard, and Supercell. It owns TiMi
Studio, Lightspeed & Quantum Studios, and Rubik's Cube Studio, which develop
games for Tencent and its partners. Tencent also owns WeChat, the world’s
largest standalone mobile app with over a billion monthly users.
Tencent is a strong endorser of esports and has successfully positioned Honor of
Kings, Clash of Clans, and PUBG Mobile in the Asia-Pacific region. Tencent also
owns stakes in DouYu and Huya, the leading esports streaming platforms in
China. Furthermore, its wholly-owned subsidiary Riot Games dominates the
global esports market with League of Legends and Valorant. In March 2020,
Tencent announced GameMatrix, a cloud gaming service designed for Android
phones, in partnership with Huawei. In August 2022, it partnered with Logitech
to develop a handheld cloud gaming console that will support Xbox Cloud
Gaming and GeForce Now.
Unity US Unity is the most widely-used game development platform. It claims that over
50% of video games across devices are built using the Unity Engine. With
expertise in creating interactive experiences, graphical avatars, and simulation
platforms, Unity offers 2D and 3D models, templates, software development kits,
and AR tools for game developers through the Unity Asset Store. It has helped
build popular games like Arena of Valor, Pokémon Go, Garena Free Fire, Mario
Kart Tour, Iron Man VR, and Genshin Impact, among many more.
Unity strengthened its position in the gaming industry by acquiring Parsec (a
cloud gaming provider) for $320 million in August 2021 and Weta Digital (a visual
effects and 3D animation provider) for $1.6 billion in November 2021. In July
2022, Unity announced the acquisition of ironSource to bolster its position in
gaming advertising. Subsequently, in August 2022, AppLovin made a $17.8 billion
bid to acquire Unity, which the company rejected. In the same month, Unity
formed a joint venture with Alibaba, China Mobile, G-Bits, miHoYo, Oppo, PCI
Tech, and Douyin Group to expand in China. Subject to regulatory approvals, this
initiative aims to bring new gaming experiences to Chinese consumers and drive
technological progress.
Source: GlobalData

Sector Scorecard
At GlobalData, we use a scorecard approach to predict tomorrow’s leading companies within each sector. Our sector
scorecards have three screens: a thematic screen, a valuation screen, and a risk screen.
The video games theme impacts many of the sectors we cover. In this section, we focus specifically on the gaming sector.
For a full explanation of thematic scoring, please refer to the methodology section at the back of this report.
Gaming sector scorecard

Who’s who
Who does what in the gaming space?
Gaming
(43 companies)
MKT CAP
Com pany Ticker Sector (US$ M) Country Description
Activision Blizzard ATVI Video games softw are 61,607 USA Interactive games developer and publisher
Alphabet GOOGL Internet ecosystems 1,432,945 USA Internet ecosystem monetised by advertising, primarily through the Google search engine
Am azon AMZN Internet ecosystems 1,322,243 USA Ecommerce giant and cloud infrastructure leader w ith a broad-ranging internet ecosystem that includes internet TV
Apple AAPL Mobile phones 2,593,498 USA Internet ecosystem monetised by the sale of proprietary hardw are (smartphones and computers)
Asus 2357 Computers 6,206 Taiw an PC contractor - motherboards, graphic cards
AT&T T Telecom operator (integrated) 126,700 USA US telecom operator, w hich ow ns DirecTV satellite TV operator and Time Warner
Bandai Nam co 7832 Video games softw are 16,603 Japan Manufacturer of toys, commercial game equipment and video games softw are.
Boyaa 434 Video games softw are 39 China Online games developer
ByteDance Unlisted Internet ecosystems Unlisted China Internet technology company, w ith products including video app TikTok
Capcom 9697 Video games softw are 7,141 Japan Video game softw are developer and arcade game machine manufacturer
Colopl 3668 Video games softw are 645 Japan Developer of mobile gaming platform and applications for smart phones.
DeNA 2432 Online retail 1,802 Japan Online retailer w ith social media
Electronic Arts EA Video games softw are 36,035 USA Video games softw are developer
Em bracer EMBRAC B Gaming 6,995 Sw eden Video games publisher
Epic Gam es Unlisted Video games softw are Unlisted USA Video games developer that created Fortnite, 40% ow ned by Tencent
Gam evil 63080 Video games softw are 277 Korea Mobile video game softw are developer
GungHo Online 3765 Video games softw are 1,507 Japan Developer and distributor of video games - including online, mobile and console games.
IGG 799 Video games softw are 497 Singapore Chinese online game operator
Kingsoft 3888 Video games softw are 4,049 Hong Kong Developer of online games and productivity softw are
Konam i 9766 Video games softw are 7,398 Japan Internet entertainment conglomerate (games to fitness to toys)
Krafton 259960 Video Games Softw are 8,485 Korea Online and mobile games developer
Meta META Social netw orks 427,777 USA Formerly Facebook. Internet ecosystem monetized via advertising on social netw orks
Microsoft MSFT Internet ecosystems 1,978,057 USA Softw are conglomerate
NCSoft 36570 Video games softw are 5,882 Korea Online Game softw are developer w ith games like Guild Wars and Lineage
NetEase NTES Video games softw are 57,503 China Portal w ith high share of China's MMORPG games market
Netm arble 251270 Online gaming 3,959 Korea South Korean mobile gaming company
Nexon 3659 Video games softw are 18,057 Japan Online and mobile games developer
Nintendo 7974 Games consoles 54,055 Japan Gaming console manufacturer and games developer
Perfect World 2624 Gaming 4,317 China Video game developer and publisher specializing in massively multiplayer online role-playing games
Playtech PTEC Video games softw are 1,599 UK Online gambling softw are
Razer Unlisted Video games softw are Unlisted USA An integrated gamer-focused ecosystem of hardw are, softw are and services.
Roblox RBLX Video games softw are 23,405 USA Video game developer and platform provider
Sea SE Online gaming 27,927 Singapore Provider of online and mobile gaming services w ith ecommerce and payment arms
Sega Sam m y 6460 Video games softw are 3,582 Japan Developer of commercial-use video game machines, home-use video game softw are and pinball machines.
Sony 6758 Audio visual equipment 103,577 Japan Technology conglomerate w ith interests in TVs, smartphones, games, etc.
Square Enix 9684 Video games softw are 5,310 Japan Games publisher (Final Fantasy, Dragon Quest)
Take-Tw o Interactive TTWO Video games softw are 20,486 USA Publisher of interactive entertainment (Grand Theft Auto)
Tencent 700 Internet ecosystems 395,928 China Chinese internet ecosystem monetized by WeChat messaging platform and gaming platform
Ubisoft UBI Video games softw are 5,562 France Video game softw are developer
Unity Technologies U Video Games Softw are 13,247 USA Video game development platform provider
Valve Unlisted Video games softw are Unlisted USA Video games developer and creator of Steam, a digital distribution platform for purchasing and playing video games
Vivendi VIV TV broadcasters 9,994 France Media company w hose primary assets include Havas, Canal+, Universal Music, Gameloft and part of Telecom Italia
Webzen 69080 Video games softw are 468 Korea Online game softw are developer
Source: GlobalData

Thematic screen
Our thematic screen ranks companies based on overall leadership in the 10 themes that matter most to
their industry, generating a leading indicator of future performance
Gaming Thematic Screen
(43 companies) Weighting 15% 5% 10% 10% 5% 10% 10% 10% 20% 5% C 100%
o
MKT CAP Mobile Social China Gam e Cloud l Them atic
Com pany (US$ M) Ticker Country Gam ing Media Im pact Regulation Ecom m erce Esports developm ent Gam ing Metaverse M&A u Ranking
Tencent 395,928 700 China 5 4 5 2 5 5 5 4 5 5 1
Unity Technologies 13,247 U USA 5 4 3 3 3 4 5 4 5 5 2
Microsoft
Epic Gam es
Meta
1,978,057
Unlisted
427,777
MSFT
Unlisted
META
USA
USA
USA
4
4
5
4
4
5
4
3
2
3
2
1
4
5
4
3
4
4
5
5
4
5
3
4
5
5
5
4
4
4
3
4
5
Thematic
NetEase
Roblox
Krafton
57,503
23,405
8,485
NTES
RBLX
259960
China
USA
Korea
5
4
5
4
4
5
5
3
3
2
3
2
4
4
5
2
3
5
4
4
4
4
3
3
4
5
3
4
5
4
6
7
8
leader
Perfect World 4,317 2624 China 4 3 5 2 4 4 5 4 3 4 9
Electronic Arts 36,035 EA USA 5 3 3 2 3 4 5 4 3 5 10
AT&T 126,700 T USA 3 3 3 3 3 5 4 4 4 4 11
Sony 103,577 6758 Japan 3 3 4 3 4 3 5 4 4 3 12
Sea 27,927 SE Singapore 4 4 3 3 4 4 4 3 4 3 13
ByteDance Unlisted Unlisted China 4 5 5 2 4 4 2 3 4 4 14
Alphabet 1,432,945 GOOGL USA 5 4 2 1 3 4 3 5 4 4 15
Activision Blizzard 61,607 ATVI USA 5 3 3 2 4 5 5 2 3 3 16
Vivendi 9,994 VIV France 4 4 3 3 4 4 4 2 4 3 17
Am azon 1,322,243 AMZN USA 3 4 3 1 5 5 2 5 4 4 18
Nexon 18,057 3659 Japan 5 3 3 3 3 3 4 2 4 3 19
Em bracer 6,995 EMBRAC B Sw eden 4 4 3 3 4 3 5 3 3 4 20
Ubisoft 5,562 UBI France 3 3 3 3 3 3 4 4 4 5 21
Netm arble 3,959 251270 Korea 5 3 3 2 2 3 5 2 4 4 22
Asus 6,206 2357 Taiw an 4 4 4 3 3 4 3 3 3 3 23
Square Enix 5,310 9684 Japan 4 3 3 3 3 3 4 4 3 4 24
Razer Unlisted Unlisted USA 2 5 3 3 4 5 3 4 3 4 25
Capcom 7,141 9697 Japan 3 3 3 3 3 3 4 3 4 3 26
Valve Unlisted Unlisted USA 2 4 2 3 5 5 4 2 4 3 27
Bandai Nam co 16,603 7832 Japan 3 2 3 3 2 3 4 3 4 4 28
Kingsoft 4,049 3888 Hong Kong 3 3 4 3 4 3 3 4 3 3 29
Colopl 645 3668 Japan 4 3 3 3 4 3 4 2 3 4 30
Nintendo 54,055 7974 Japan 3 3 3 3 3 2 5 1 4 3 31
Take-Tw o Interactive 20,486 TTWO USA 4 3 3 2 3 3 4 2 3 4 32
Apple 2,593,498 AAPL USA 5 3 2 2 4 1 3 1 4 4 33
Thematic
NCSoft 5,882 36570 Korea 3 3 3 2 3 3 4 3 3 3 34
IGG 497 799 Singapore 4 3 3 3 3 2 4 3 2 3 35
Gam evil 277 63080 Korea 4 3 3 2 3 3 4 3 2 3 36
laggard
DeNA 1,802 2432 Japan 4 4 2 2 4 3 4 2 2 4 37
Webzen 468 69080 Korea 3 3 3 2 3 3 4 3 2 3 38
Playtech 1,599 PTEC UK 4 2 3 1 3 3 3 3 2 3 39
GungHo Online 1,507 3765 Japan 2 3 3 3 4 3 4 2 2 3 40
Konam i 7,398 9766 Japan 3 3 3 3 2 2 4 2 2 3 41
Sega Sam m y 3,582 6460 Japan 3 2 3 2 4 2 4 2 2 4 42
Boyaa 39 434 China 2 3 2 2 3 3 4 3 2 3 43
Key: 1 (red) implies this theme will have a negative impact on earnings over the next 12 months; 3 (amber) implies a neutral impact; and 5 (green) a
positive impact. See the methodology section at the back of this report for an explanation of our research methodology.
Source: GlobalData

Valuation screen
Our valuation screen ranks our universe of companies within a sector based on selected valuation metrics
Gaming Valuation Screen
(43 companies) Weighting 25% 20% 15% 20% 20% C 100%
Net Debt o
MKT CAP (Cash)/ Market l Valuation
Com pany (US$ M) Ticker Country EV/EBITDA EV/Sales Div yield % Value % FCF yield % u Ranking
Asus 6,206 2357 Taiw an 2.7 0.3 10.3 -93.4 16.2 1
IGG 497 799 Singapore 3.3 0.3 20.5 -72.1 10.0 2
GungHo Online 1,507 3765 Japan 3.1 1.0 1.0 -55.6 11.1 3
Sony 103,577 6758 Japan 7.7 1.5 0.5 -130.7 5.6 4
Sega Sam m y 3,582 6460 Japan 8.9 1.2 1.9 -27.6 5.9 5
Vivendi 9,994 VIV France 23.6 1.1 6.5 -93.9 11.8 6
Webzen
AT&T
468
126,700
69080
T
Korea
USA
3.4
6.5
1.3
1.8 11.9
-66.9
119.6
13.6
20.1
7
8
Cheap
DeNA 1,802 2432 Japan 12.9 1.5 1.6 -92.2 4.8 9
Colopl 645 3668 Japan 6.9 0.6 3.6 -77.7 -3.3 10
Konam i 7,398 9766 Japan 9.1 2.8 1.1 -19.5 7.2 11
Kingsoft 4,049 3888 Hong Kong 10.1 3.6 0.8 -77.4 6.9 12
Square Enix 5,310 9684 Japan 8.7 1.6 1.3 -22.1 2.7 13
Nintendo 54,055 7974 Japan 9.4 3.4 3.2 -27.1 3.8 14
Boyaa 39 434 China -32.0 -3.0 -654.3 45.2 15
NCSoft 5,882 36570 Korea 13.7 2.9 2.2 -32.6 1.3 16
Meta 427,777 META USA 7.0 3.2 -12.7 9.1 17
Bandai Nam co 16,603 7832 Japan 13.8 2.3 1.1 -15.9 4.1 18
Tencent 395,928 700 China 8.7 5.1 0.5 -26.7 4.2 19
Ubisoft 5,562 UBI France 6.8 2.9 10.1 11.1 20
NetEase 57,503 NTES China 16.4 3.7 0.9 -25.7 5.5 21
Playtech 1,599 PTEC UK 8.2 1.8 34.0 6.9 22
Netm arble 3,959 251270 Korea 22.5 2.5 1.2 -61.1 0.7 23
Krafton 8,485 259960 Korea 12.5 4.5 -32.1 5.7 24
Gam evil 277 63080 Korea 11.7 3.5 -107.8 -0.3 25
Perfect World 4,317 2624 China 104.0 3.4 1.1 -19.3 2.3 26
Activision Blizzard 61,607 ATVI USA 14.8 6.2 0.6 -11.3 3.8 27
Capcom 7,141 9697 Japan 18.8 8.0 0.9 -10.4 4.4 28
Electronic Arts 36,035 EA USA 21.6 5.0 0.5 -3.3 4.7 29
Nexon 18,057 3659 Japan 20.6 7.7 0.2 -25.7 3.7 30
Alphabet 1,432,945 GOOGL USA 14.4 5.1 -10.8 4.7 31
Microsoft 1,978,057 MSFT USA 19.8 9.8 0.9 -2.4 3.3 32
Apple 2,593,498 AAPL USA 22.1 7.3 0.6 -2.5 3.6 33
Am azon
Sea
1,322,243
27,927
AMZN
SE
USA
Singapore
21.9
-16.4
2.8
2.1
-3.3
-27.3
-1.1
-2.1
34
35
Expensive
Em bracer 6,995 EMBRAC B Sw eden 14.6 5.2 19.2 0.3 36
Take-Tw o Interactive 20,486 TTWO USA 23.8 5.1 -12.5 0.5 37
Roblox 23,405 RBLX USA -51.0 11.1 -8.6 2.4 38
Unity Technologies 13,247 U USA -28.3 11.9 -0.3 -1.2 39
ByteDance Unlisted Unlisted China 40
Epic Gam es Unlisted Unlisted USA 41
Razer Unlisted Unlisted USA 42
Valve Unlisted Unlisted USA 43
Median 9.1 2.8 0.5 -19.5 4.1
Mean 9.4 3.3 1.7 -41.4 5.6
Key: 1 (red) implies this theme will have a negative impact on earnings over the next 12 months; 3 (amber) implies a neutral impact; and 5 (green) a
positive impact. See the methodology section at the back of this report for an explanation of our research methodology.
Source: GlobalData

Risk screen
Our risk screen ranks companies within a particular sector based on overall investment risk
Gaming Risk Screen
(43 companies) Weighting 40% 30% 15% 15% C 100%
o
MKT CAP Operational l Risk
Com pany (US$ M) Ticker Country Risk Financial Risk Industry Risk Country Risk u Ranking
Nexon 18,057 3659 Japan 4 5 4 5 1
Am azon 1,322,243 AMZN USA 5 3 4 5 2
Meta 427,777 META USA 4 5 3 4 3
Bandai Nam co 16,603 7832 Japan 4 5 3 4 4
Nintendo 54,055 7974 Japan 4 4 4 4 5
Electronic Arts 36,035 EA USA 4 4 4 4 6
GungHo Online 1,507 3765 Japan 4 4 4 4 7
Square Enix 5,310 9684 Japan 4 4 3 5 8 Low risk
Webzen 468 69080 Korea 3 5 4 4 9
Activision Blizzard 61,607 ATVI USA 4 4 4 3 10
Alphabet 1,432,945 GOOGL USA 4 4 3 4 11
Krafton 8,485 259960 Korea 4 4 3 5 12
NCSoft 5,882 36570 Korea 4 4 4 5 13
Capcom 7,141 9697 Japan 3 4 4 5 14
Colopl 645 3668 Japan 3 4 4 5 15
Netm arble 3,959 251270 Korea 3 4 4 5 16
Microsoft 1,978,057 MSFT USA 4 3 4 4 17
NetEase 57,503 NTES China 4 3 4 4 18
Take-Tw o Interactive 20,486 TTWO USA 3 4 4 4 19
Unity Technologies 13,247 U USA 3 3 4 5 20
Epic Gam es Unlisted Unlisted USA 3 3 4 5 21
Valve Unlisted Unlisted USA 3 3 4 5 22
Sony 103,577 6758 Japan 4 3 3 4 23
Asus 6,206 2357 Taiw an 3 4 3 5 24
DeNA 1,802 2432 Japan 3 3 4 5 25
IGG 497 799 Singapore 3 4 4 4 26
Apple 2,593,498 AAPL USA 4 3 3 3 27
Tencent 395,928 700 China 4 2 4 4 28
Kingsoft 4,049 3888 Hong Kong 3 3 4 4 29
ByteDance Unlisted Unlisted China 3 3 4 4 30
AT&T 126,700 T USA 3 3 3 5 31
Konam i 7,398 9766 Japan 3 3 3 5 32
Sega Sam m y 3,582 6460 Japan 3 3 3 5 33
Perfect World 4,317 2624 China 3 3 4 4 34
Vivendi 9,994 VIV France 3 3 4 3 35
Ubisoft 5,562 UBI France 3 3 4 5 36 High risk
Em bracer 6,995 EMBRAC B Sw eden 3 3 4 5 37
Playtech 1,599 PTEC UK 2 3 4 3 38
Roblox 23,405 RBLX USA 1 4 4 5 39
Razer Unlisted Unlisted USA 3 2 3 3 40
Gam evil 277 63080 Korea 2 2 4 5 41
Boyaa 39 434 China 1 4 4 3 42
Sea 27,927 SE Singapore 2 2 4 3 43
Key: Green denotes low risk; amber denotes medium risk; red denotes high risk. See the methodology section at the back of this report for an
explanation of our research methodology.
Source: GlobalData

Glossary
Term Definition
5G The fifth generation of cellular technology standards, which will be based on IMT2020
standards, is under development by the 3GPP. The term ‘5G’ does not explicitly refer to any
particular technology or standard and is, therefore, a loose term that can be used and
interpreted in multiple different ways, typically for marketing purposes.
AAA (Triple-A) A classification term used for video games with the highest development budgets and levels
of promotion.
Ad network A company or an online service that connects advertisers with app developers.
App Tracking A feature of Apple’s iOS that mandates that apps and games on the App Store seek users’
Transparency (ATT) permission to track their activity.
Application A set of defined methods of communication between programs so that information can be
programming exchanged without the need to access the core of either program.
interface (API)
Artificial intelligence Refers to software-based systems that use data inputs to make decisions on their own.
(AI)
Augmented reality Technology that allows the user to see the real world overlaid with a layer of digital content.
(AR) This digital content layer can include sensor-based data, sound, video, graphics, or other
datasets.
Augmented reality Augmented reality (AR) headsets are head-mounted display (HMD) devices that allow users
headset to see the real world overlaid with a layer of digital content.
Avatars An icon or digital figure that represents a person in a video game or internet forum.
Battery A container consisting of one or more electrochemical cells in which chemical energy is
converted into electricity. Batteries are used as a source of power.
Battle royale game A type of game that blends the survival, exploration, and scavenging elements typical of a
survival game with last-person-standing gameplay.
Beta A term used for a phase of development in the process of making an electronic game.
Bitcoin The cryptocurrency that first introduced blockchain technology to the world. Bitcoin is
decentralized and open source.
Blockchain A blockchain is a type of distributed ledger, comprising unchangeable, digitally recorded
data in packages called blocks. Each block is then “chained” to the next block, using a
cryptographic signature. This allows blockchains to be used like a ledger, which can be
shared and accessed by anyone with the appropriate permissions.
Brand A type of product manufactured by a particular company under a particular name.
Casual game A video game targeted at a wide, mass-market audience. Casual games do not require a
major time investment to play, have simple rules, and are usually found on either mobile
devices or personal computers.
Central processing The unit that performs most of the processing inside a computer. It carries out all the logical
unit (CPU) and arithmetical operations.

Term Definition
Cloud computing Refers to computing delivered as an online service. It encompasses the provision of IT
infrastructure, operating software, middleware, and applications hosted within a data
center and accessed by the end-user via the internet.
Cloud gaming Refers to a game that resides on a server, rather than on the gamer’s computer or device. A
video of gameplay is streamed to the users, with their inputs sent back to the cloud gaming
server via the network.
Content delivery A geographically distributed network of servers that store cached meta content on edge
network (CDN) servers and act as gateways for bi-directional data transfer between the servers and users,
enabling faster access to high-quality data.
Cryptocurrency A form of digital currency based on mathematical algorithms, where encryption techniques
are used to regulate the generation of units of currency and verify the transfer of funds.
Cryptocurrencies operate independently of central banks.
Customization The process of modifying or adjusting something to fit a particular person or task.
Cybersecurity The practice of defending computers, servers, mobile devices, electronic systems, networks,
and data from malicious attacks.
Data analytics The practice of extracting meaning from raw data using specialized computer systems.
Data center A facility used to house computer systems and associated networking equipment to capture,
store, analyze, and re-transmit data.
Data privacy Refers to how customers' information is handled and shared by a company based on its
importance, individual consent, or regulatory obligations.
Downloadable Additional content created for video games, which is distributed through the Internet.
content (DLC)
Ecommerce The buying and selling of goods and services over an electronic network (typically the
internet).
Esports Organized multiplayer video game competitions, typically involving professional players.
Freemium An internet-based service model, where basic contents are provided free of charge while
access to advanced features requires payments.
Game developer An independent or publisher-owned studio that creates video games.
Game engine A software framework designed for the creation and development of video games.
Game publisher A company that publishes video games that have either been developed internally or
externally by a third-party video game developer. They are traditionally responsible for their
product's manufacturing and marketing, including market research and all aspects of
advertising.
Games-as-a-service GaaS is an industrial outlook where game companies view games as services and provide
(GaaS) content on a continual revenue model.
Generation Z (or Generation Z (or iGen) consists of anyone born between 2001 and 2019.
iGen)

Term Definition
Graphics processing A programmable logic chip specialized for display functions. Modern GPUs can manipulate
unit (GPU) computer graphics and provide image processing very efficiently. They are also able to take
large data sets and perform the same operation repeatedly and at high speed, which has
made them fundamental to the development of artificial intelligence technologies.
Human rights Basic rights and freedoms that belong to every person, from birth until death. Human rights
include the right to life and liberty, freedom of opinion and expression, the right to work,
and the right to education.
Input/output (I/O) A term used to describe any program, operation, or device that transfers data to or from a
computer and to or from a peripheral device.
Integrated circuit (IC) An electronic circuit formed on a piece of semiconducting material that can be programmed
to perform certain tasks such as computing or storing data.
Latency The time it takes a data packet to transit from point A to point B.
League A form of competition in which a group of teams competes against each other in a specific
sport or game over a set period.
Live service games Online multiplayer games to which new content can be added post-launch.
Local area network A type of computer network that connects multiple computers within a limited area.
(LAN)
Loot box Consumable in-game virtual items, awarded to players at random for completion of a stage
or a match. Typically a form of monetization.
Malware Malicious or hostile software used to attack or infiltrate a computer system or network.
Often embedded in non-malicious files or programs, it includes things like computer viruses,
worms, ransomware, and spyware.
Media rights The exclusive right to broadcast live events. The cost of these rights is negotiated between
the organizer and the media companies.
Metaverse A virtual world where users share experiences and interact in real-time within simulated
scenarios.
Microtransaction A revenue generation model which allows gamers to purchase virtual items with
micropayments.
Mobile payments Refers to transactions made or received using a mobile device, such as a smartphone or
tablet.
Non-fungible token A unit of data stored on a blockchain to certify ownership of a digital asset like image, audio,
(NFT) video, or other types of collectibles like books, blogs, tweets, or memes.
Online gambling Any kind of gambling conducted on the internet. Popular examples include virtual poker,
sports betting, and virtual casinos.
Online gaming The action or practice of playing video games on the internet.
Online marketplace An online platform where products or service information are provided by multiple third
parties, whereas transactions are processed by the marketplace operator.
Operating system Software that supports a computer’s basic functions, such as scheduling tasks and managing
(OS) peripherals. Examples include Microsoft Windows, Apple’s iOS, and Google’s Android.

Term Definition
Play-to-earn A revenue model where blockchain-based games reward players with either
cryptocurrencies or non-fungible tokens (NFTs).
Quality of service Refers to a network’s ability to achieve maximum bandwidth and deal with other network
(QoS) performance elements like latency, error rate, and uptime. QoS requires the ability to
prioritize applications, users, or data flows, or to guarantee a certain level of service to a
data flow.
Role-playing game A type of game where the player controls the actions of a character (or team of characters)
(RPG) immersed in a well-defined world.
Skins Collectible, virtual items in video games that change the appearance of characters or
weapons.
Social games Multiplayer online games that are played on social media platforms.
Social media Computer-mediated technologies that facilitate the creation and sharing of information,
ideas, career interests, and other forms of expression via virtual communities and networks.
Special purpose A company that is created solely to merge or acquire another business and take it public.
acquisition company
(SPAC)
Streaming A distribution process that allows for a multimedia file to be accessed without being
downloaded first.
Subscription An agreement with a company to receive a product or service regularly by paying in advance,
typically on a weekly, monthly, or annual basis.
Sustainability An approach that focuses on environmental, social, and governance (ESG) factors to ensure
the long-term growth of a company or country.
System on a chip A microchip that contains all the components required for a given electronic system, such
(SoC) as a computer, on a single integrated circuit. Its components usually include a graphics
processing unit (GPU), a central processing unit (CPU), and system memory.
Tournament A sporting competition in which players or teams that win a match continue to play further
matches in the competition until just one person or team is left.
Transaction An asset transfer onto or off the ledger.
Virtual reality (VR) Refers to technology that aims to immerse the user in an entirely artificial world, which has
the illusion of reality. It uses special equipment such as headsets or gloves fitted with sensors
to simulate a user's physical presence in a 3D environment.
Web3 An ideology that refers to the next iteration of the internet built on blockchain. It promises
a mesh of peer-to-peer communication channels and decentralized governance, leading the
internet’s transition from an information-centric model to a user-centric model.
Source: GlobalData

Further Reading
GlobalData reports
Publication date Report title
August 2022 France Gaming Software Forecast
August 2022 Spain Gaming Software Forecast
August 2022 UK Gaming Software Forecast
August 2022 Italy Gaming Software Forecast
May 2022 Thematic Research: The Metaverse
April 2022 Thematic Research: Cybersecurity (2022)
April 2022 Thematic Research: Global M&A Deals in Q1 2022 - Top Themes by Sector
February 2022 Germany Gaming Software Forecast
February 2022 Thematic Research: Adtech
December 2021 Thematic Research: Tech, Media, & Telecom Themes 2022
December 2021 Thematic Research: Tech, Media, & Telecom Predictions 2022
November 2021 Thematic Research: Virtual Reality (2021)
September 2021 Thematic Research: Japan Tech (2021)
September 2021 Thematic Research: Augmented Reality (2021)
June 2021 Thematic Research: Social Media
June 2021 Thematic Research: Mobile Gaming
May 2021 5G Global Update: Big Names Emerging as a Key Gaming Partners for Carriers
May 2021 Thematic Research: Blockchain (2021)
May 2021 Verizon Wireless Offers Free Gaming Offer
May 2021 Thematic Research: Sport and Esports

Publication date Report title
February 2021 Thematic Research: Cloud Gaming
January 2021 Ooredoo Kuwait Offers 5G Gaming QoS Holy Grail
January 2021 Global 5G Update: Carriers Beginning to Position Gaming as a 5G Differentiator
January 2021 The Business of Esports 2020
December 2020 eGaming: Telco Value Propositions & Bundling Strategies
December 2020 Thematic Research: Tech, Media, & Telecom Themes 2021
September 2020 Amazon Aims to Differentiate Cloud Gaming with Twitch and Alexa Integration
August 2020 Global 5G Update: Microsoft’s Cloud Gaming Service Has Arrived on Android, but Apple Still
Says No
July 2020 Global 5G Update: COVID-19 Pandemic Accelerates 5G Gaming Opportunity
May 2020 Thematic Research: Esports
April 2020 COVID 19 - Sector Impact Analysis - Esports
April 2020 Thematic Research: COVID-19 Impact on Gaming Software
February 2020 Nvidia’s GeForce Now Is a Match Made for 5G
January 2020 BT Looks to Pick Up Broadband Pace with Google Stadia Gaming Partnership
November 2019 Thematic Research: Augmented Reality (2019)
October 2019 Thematic Research: Virtual Reality (2019)
October 2019 Proximus Aims to Over-Shadow Multiplay Competitors with Cloud Gaming Promo
June 2019 Decoding the eGaming & eSports Ecosystem for Telecoms
April 2019 Thematic Research: Video games
March 2019 Google’s Stadia Cloud Gaming System Is a Use Case for 5G
February 2019 MWC19: Sprint’s 5G Network Will Debut in May with a Cloud-Based Gaming Service
Source: GlobalData

Our Thematic Research Methodology

Companies that invest in the right themes become success stories. Those that miss the important themes in their
industry end up as failures.
Viewing the world’s data by themes makes it easier to make important decisions
We define a theme as any issue that keeps a CEO awake at night. GlobalData’s thematic research ecosystem is a single,
integrated global research platform that provides an easy-to-use framework for tracking all themes across all
companies in all sectors. It has a proven track record of identifying the important themes early, enabling companies to
make the right investments ahead of the competition and secure that all-important competitive advantage.
Traditional research does a poor job of picking winners and losers

The difficulty in picking tomorrow’s winners and losers in any industry arises from the sheer number of technology
cycles—and other themes—that are in full swing right now. Companies are impacted by multiple themes that
frequently conflict with one another. What is needed is an effective methodology that reflects, understands, and
reconciles these conflicts.
That is why we developed our “thematic engine”

At GlobalData, we have developed a unique thematic methodology for ranking all major companies in all major sectors
based on their relative strength in the big themes that are impacting their industries.
Our thematic engine tags over 38 million data items across five alternative data sets—patents, jobs, deals, filings, and
news—to themes. The vast datasets within our thematic engine help our analysts to produce sector scorecards that
identify the companies best placed to succeed in a future filled with multiple disruptive threats.
How do we create our sector scorecards?

First, we split each industry into its component sectors, because each sector is driven by a different set of themes.
Taking the TMT (technology, media, and telecom) industry as an example, we split this industry into the sectors shown
in the graphic below.
Our five-step approach for generating a sector scorecard

Here we use the tech, media, and telecom sector as an example sector, for illustration purposes
Sectors Themes Research Thematic screen Sector scorecard
1. Split the global TMT 2. Identify and rank the 3. Identify and score 4. Calculate overall 5. Rank leading companies in
industry into 17 sectors. top 10 themes disrupting leaders and challengers thematic rankings for each sector using our three
each sector. for each theme. all companies in a sector. screens.
Hardware
Semiconductors 1. Artificial
Consumer electronics intelligence
Component makers
IT infrastructure
Sector Scorecard =
Telecom infrastructure
Industrial automation 2. Cloud Thematic screen
Software and Services computing
Application software +
Cloud services Valuation screen
Enterprise security
Gaming +
IT services 3. Blockchain Risk Screen
Internet and Media
Ecommerce
Social media
Advertising
Music, film, and TV
Publishing
10. Internet of
Telecoms Things
Source: GlobalData

Second, we identify and rank the top 10 themes for each sector (these can be technology themes, macroeconomic
themes, or industry-specific themes). Third, we publish in-depth research on specific themes, identifying the winners and
losers within each theme. The problem is that companies are exposed to multiple investment themes and the relative
importance of specific themes can fluctuate. So, our fourth step is to create a thematic screen for each sector to calculate
overall thematic leadership rankings after taking into account all themes impacting that sector. Finally, to give a crystal-
clear picture, we combine this thematic screen with our valuation and risk screens to generate a sector scorecard used
to help assess overall winners and losers.
What is in our sector scorecards?

Our sector scorecards help us determine which companies are best positioned for a future filled with disruptive threats.
Each sector scorecard has three screens:
▪ The thematic screen tells us who are the overall leaders in the 10 themes that matter most, based on our thematic
engine.
▪ The valuation screen tells us whether publicly listed players appear cheap or expensive relative to their peers, based
on consensus forecasts from investment analysts.
▪ The risk screen tells us who the riskiest players in each industry are, based on our assessment of four risk categories:
operational risk, financial risk, industry risk, and country risk.
How do we score companies in our thematic screen?

Our thematic screen ranks companies within a sector based on overall leadership in the 10 themes that matter most to
their industry, generating a leading indicator of future earnings growth.
Thematic scores predict the future, not the past. Our thematic scores are based on our analysts’ assessment of their
competitive position in relation to a theme, on a scale of 1 to 5:
1 Vulnerable The company’s activity in this theme will be highly detrimental to its future performance.
2 Follower The company’s activity in this theme will be detrimental to its future performance.
Neutral The company’s activity in this theme will have a negligible impact on the company’s future
3
performance, or this theme is not currently relevant for this company.
Leader The company is a market leader in this theme. The company’s activity in this theme will
4
improve its future performance.
Dominant The company is a dominant player in this theme. The company’s activity in this theme will
5
significantly improve its future performance.
How do our research reports fit into our overall thematic research ecosystem?
Our thematic research ecosystem is designed to assess the impact of all major themes on the leading companies in a
sector. To do this, we produce three tiers of thematic reports:
▪ Single Theme: These reports offer in-depth research into a specific theme (e.g., artificial intelligence). They identify
winners and losers based on technology leadership, market position, and other factors.
▪ Multi-Theme: These reports cover all themes impacting a sector and the implications for the key players in that
sector.
▪ Sector Scorecard: These reports identify those companies most likely to succeed in a world filled with disruptive
threats. They incorporate our thematic screen to show how conflicting themes interact with one another, as well as
our valuation and risk screens.

About GlobalData
GlobalData is a leading provider of data, analytics, and insights on the world's largest industries. In an increasingly fast-
moving, complex, and uncertain world, it has never been harder for organizations and decision-makers to predict and
navigate the future. This is why GlobalData’s mission is to help our clients to decode the future and profit from faster,
more informed decisions. As a leading information services company, thousands of clients rely on GlobalData for trusted,
timely, and actionable intelligence. Our solutions are designed to provide a daily edge to professionals within
corporations, financial institutions, professional services, and government agencies.
Unique Data
We continuously update and enrich 50+ terabytes of unique data to provide an unbiased, authoritative view of the
sectors, markets, and companies offering growth opportunities across the world's largest industries.
Expert Analysis
We leverage the collective expertise of over 2,000 in-house industry analysts, data scientists, and journalists, as well as a
global community of industry professionals, to provide decision-makers with timely, actionable insight.
Innovative Solutions
We help you work smarter and faster by giving you access to powerful analytics and customizable workflow tools tailored
to your role, alongside direct access to our expert community of analysts.
One Platform
We have a single taxonomy across all of our data assets and integrate our capabilities into a single platform – giving you
easy access to a complete, dynamic, and comparable view of the world’s largest industries.

Contact Us
If you have any more questions regarding our research, please contact us:
Head of Thematic Intelligence Customer Success Team

Cyrus Mewawalla Understand how to use our Themes product
[email protected] [email protected]
+44 (0) 207 936 6522 +44 (0) 207 406 6764
_________________________________________________________________________________________________
Disclaimer: All Rights Reserved. No part of this publication may be reproduced, stored in a retrieval system, or
transmitted in any form by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior
permission of the publisher, GlobalData. The facts of this report are believed to be correct at the time of publication but
cannot be guaranteed. Please note that the findings, conclusions, and recommendations that GlobalData delivers will be
based on information gathered in good faith from both primary and secondary sources, whose accuracy we are not always
in a position to guarantee. As such, GlobalData can accept no liability whatsoever for actions taken based on any
information that may subsequently prove to be incorrect.

Thematic Intelligence Video Games 2022

Uploaded by

Copyright:

Available Formats

Thematic Intelligence Video Games 2022

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Thematic Intelligence Video Games 2022

Uploaded by

Copyright:

Available Formats

Thematic Intelligence: Technology

Technology Briefing ...................................................................................................................................................... 5

Industry Analysis .........................................................................................................................................................14

Value Chain .................................................................................................................................................................22

Sector Scorecard ..........................................................................................................................................................46

Further Reading ...........................................................................................................................................................54

Our Thematic Research Methodology .........................................................................................................................56

About GlobalData ........................................................................................................................................................58

WWW.GLOBALDATA.COM © GlobalData Plc 2022 | 2

WWW.GLOBALDATA.COM © GlobalData Plc 2022 | 3

Video games value chain Leaders Challengers

Activision Blizzard NetEase Amazon Nexon

Chukong Nintendo Bandai Namco Niantic

Activision Blizzard Mastercard Affle (Appnext) One97 (Paytm)

Amazon Metamask Axis Esports Razorpay

A1 Telekom Epic Games Baidu Loudplay

Alphabet (Google) Microsoft CD Projekt (GOG) Ooredoo

Acer Logitech Analogue Panic

Apple Nintendo Corsair Roku

WWW.GLOBALDATA.COM © GlobalData Plc 2022 | 4

There are two main types of gaming consoles

Source: The Express Tribune, Gamers Hideout

WWW.GLOBALDATA.COM © GlobalData Plc 2022 | 5

PC gaming is typically at-home entertainment

Source: CNN, Polygon

WWW.GLOBALDATA.COM © GlobalData Plc 2022 | 6

Two main types of connected devices are used in mobile gaming

Source: TechRadar, Gadget360

See Mobile Gaming.

WWW.GLOBALDATA.COM © GlobalData Plc 2022 | 7

There are two approaches to cloud gaming

Source: Nokia Bell Labs

See Cloud Gaming.

Esports can be watched in a stadium or online

Source: Panaynews, Panda Security

WWW.GLOBALDATA.COM © GlobalData Plc 2022 | 8

Trend What’s happening?

WWW.GLOBALDATA.COM © GlobalData Plc 2022 | 9

Trend What’s happening?

WWW.GLOBALDATA.COM © GlobalData Plc 2022 | 10

Trend What’s happening?

WWW.GLOBALDATA.COM © GlobalData Plc 2022 | 11

Trend What’s happening?

WWW.GLOBALDATA.COM © GlobalData Plc 2022 | 12

Trend What’s happening?

WWW.GLOBALDATA.COM © GlobalData Plc 2022 | 13

The gaming software market will be worth $470 billion by 2030

Gaming software revenue, 2021 - 2030

Gaming software revenue by type, 2021 - 2030

WWW.GLOBALDATA.COM © GlobalData Plc 2022 | 14

Mergers and acquisitions

There were 52 video games-related M&A deals in 2021, up from 46 in 2020

Video games-related M&A deals by value and volume, 2017 - H1 2022

Source: GlobalData Deals Database

WWW.GLOBALDATA.COM © GlobalData Plc 2022 | 15

Date Acquirer Target Value Target company description

Aug 2021 Playtika Reworks 400 Mobile games developer

Jun 2021 Take-Two Interactive Nordeus 378 Mobile games developer

May 2021 Zynga Chartboost 250 Mobile game ad monetization specialist