Video Game Industry: A Social Menace or Addictive Learning Tool?

Counting the Loot

Flickr via joey.parsons

The video game industry may be progressing in the right direct in terms of the technical aspects, but what about the growth of the industry in financial terms? According to a study done by PriceWaterhouseCoopers (PwC), global video game revenues have increased gradually from $21.88 billion in 2002 to $41.90 billion in 2007. Forecasts done by PwC predict that the industry will continue to grow with revenues hitting $68.4 billion in 2012.

This is in alignment with previous forecasts, which expect that the gaming industry will outshine other entertainment areas, like music and movies, in terms of growth. It is expected that console games will make up the majority of the sales for the gaming sector, with sales expected to increase from $24.9 billion in 2007 to $34.7 billion in 2012 – growth of 6.9 percent. The Internet is also expected to play a role in the following years with online games anticipated to generate revenues of $14.4 billion in 2012, in contrast to the $6.6 billion produced in 2007.

Even though the gaming sector is thriving for the most part, there are some gaming markets that are predicted to decline in the future. One such division is the PC gaming market. Although, some industry experts deny the forecasted decline for the market, according to the study, the PC gaming market is projected to decline to $3.6 billion in 2012 from the $3.8 billion revenues generated in 2007. This is due to the decreasing amount of quality games being released, which interest PC gamers.

Meanwhile, the increased number of in-game advertising, which generated $1 billion in profits in 2007, will be expected to swell in the coming years. With Microsoft acquiring the video game advertising company, Massive, and Sony teaming up with a similar company in IGA Worldwide, it is expected that other companies will also look to reap profits from advertising within games. It is expected that in-game advertising will reap profits of $2.3 billion in 2012.

Much of what has been discussed thus far has revolved around video games for consoles and PCs; but what about the app market for video games? In recent years, this market has created blockbusters, such as Angry Birds and Cut the Rope. Is this a sign for the future of the video game application market or a short-period spurt?

[pullquote]You’ve probably heard of “that guy” who played StarCraft until his death.[/pullquote]

The study expects that this “oft-ignored” market to enjoy the best growth in the gaming industry. It is expected that the mobile gaming market expanded by 19 percent in 2012 with sales increasing from $5.6 billion to $13.5 billion from 2007 to 2012. Moreover, the study suggests that Canada will benefit greatly from this outburst, as the Canadian mobile gaming market is anticipated to collect $346 million in 2012.