Games market is to climb to $339bn by 2027, predicts Omdia

At IBC2023 which got underway on September 15-18 in RAI, Amsterdam, the media research outfit and Digital TV Europe’s sister company, Omdia, has forecasted total revenue for the games market is to climb to $339bn by 2027.

IBC’s exclusive premium research partner, said the games market which is currently valued at over $250bn will be the second top source of revenue after online video advertising.

Omdia pointed to HBO’s breakout hit series The Last Of Us, and record-breaking box office figures for The Super Mario Bros. Movie, for the increased prominence of game adaptations into film and TV.

The findings come from a new, exclusive report on the value of gaming IP that was provided to all IBC Premium Delegates.

Speaking at IBC, Maria Rua Aguete, Omdia’s technology fellow and executive director for Media, Service Providers & Platforms, told the delegates games advertising already generates $70bn, while total gaming revenues reached $250bn at the end of 2022 – more than all the global SVOD combined.

Omdia highlighted that in recent years, the arrival of streaming services—competing against cinema and traditional TV—has seen demand soar for familiar and marketable IP. This context has produced its own challenging dynamics. In essence, streaming services and studios need ever more content to monetise their services and guarantee profitability. With two-thirds of US consumers identifying as gamers, the dedicated fan bases and existing IP in games are thus becoming more valuable as adaptation material.

According to Aguete, these also bring opportunities for telcos aggregation, games, video, music all in one place, with overlapping ecosystems to dominate entertainment service strategy in 2024.

The research firm said service providers that provide hard-line services are under more pressure to increase margins, reduce churn, and offset declines in legacy services such as telephony. Platform, service, and content owners are also under the same pressures to aggregate. They must consider integrated partnerships to continue growing.

Service providers, especially those that rely on sports, need to consider adding additional services to their bundles, Omdia suggests.

Aguete said, “putting content on TV makes people buy the game and vice versa…engaging eyeballs creates stickiness, which in turn drives revenue for gaming IP.”

“Based on video games, Netflix is leading the race in adopting this [type of] content onto the video screen. They know that there is a lot of interest and they have been investing intensively. Why is Netflix investing so heavily? They don’t own much IP. So this is a good way for them to monetise whatever IP they can obtain”, she added.