- Two-thirds of people in the US under 18 years old play video games online, putting it only behind watching YouTube videos as an activity, per PC Magazine.
- With the new release of widely popular video games and next-generation consoles, in addition to strong consumer spending on games, the industry could see explosive product sales in 2023.
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Though video gaming has been around for decades, it was the entertainment of choice for many during the pandemic. Average time spent gaming soared 16.5% between 2019 and 2020, from 12.7 to 14.8 hours per week, according to The NPD Group. That growth rate barely slowed in 2021, with time spent growing to 16.5 hours.
But will this trend continue into 2023? Insider intelligence predicts that some of the gaming market growth will taper off in the coming year.
US Gaming Devices & Trends
In 2022, we estimated that more than half (54.2%) of the US population were digital gamers. Mobile gaming was the largest segment, with 48.3% of the population (162.9 million people) playing games on their smartphones.
Nearly one in four (24%) of video game developers predict that mobile will grow more than other types of games by 2025—far exceeding their projections for console games (10%) and the metaverse (18%).
There’s also significant overlap between mobile, console, and desktop/laptop gamers. For example, nearly 9 in 10 digital gamers play mobile games, which means just over 10% of gamers are strictly committed to desktop or console.
Despite the overlap, demographic makeups differ between platforms. Though the stereotypical gamer is a young male, three-quarters of mobile-only gamers are female, according to a June 2021 Comscore study. The stereotype does ring true in console and desktop/laptop gaming, where men make up about two-thirds of players on both platforms.
The gaming audience also skews younger. Nearly three-quarters (74.2%) of those ages 18 to 24 play video games, per our estimates. For comparison, TV penetration for the same age group is just 58.2% and falling.
Gaming also makes up a larger part of younger users’ media diets. According to Deloitte’s 2022 media trends report, playing video games is the favorite entertainment activity among Gen Z respondents in five different countries (the US, UK, Germany, Brazil, and Japan). Gen Z spends one-quarter of their leisure time playing video games, more time spent than any other medium, per Newzoo. Millennials also spend more of their time gaming than with any other media type.
Video Game Industry Ad Revenue
Consumer spend on gaming grew significantly over the past few years before cooling this year, according to The NPD Group.
But while consumer spend shrinks, ad revenues are growing. US mobile gaming ad spend will grow 10.0% to $6.28 billion in 2023 and continue to grow by between 8% and 10% over the next few years, according to our forecast. Esports ad revenues are growing at around the same rate and will pass a quarter of a billion dollars in 2023.
US Gaming Trends and Stats
2023 could be a banner year for the gaming industry, with advancing technology supercharging game product sales.
A combination of AI and virtual reality (VR) innovations, for example, have improved the gaming experience significantly. The use of AI are giving rise to enhanced artistic qualities and photorealistic animation, as well as originality in dialogue and character depth. As companies invest in AI and VR, and even 5G infrastructure, expect more impressive-looking games to drive adoption, especially among Gen Z.
Gaming also has a reason to be hopeful based on 2022’s Black Friday and Cyber Monday sales performance. Cyber Monday in particular generated $11.3 billion in online sales, up 5.8% YoY, driven by deep discounts on electronics with video games, consoles, Apple Watches, drones, and digital cameras some of the top products.
This year, with falling inflation bolstered by support from the US Federal Reserve, consumers might be more inclined to open their wallets for exciting game titles and possible AI-driven enhancements.
Esports Viewership Trends
Esports is a subset of gaming video content and is defined by Insider Intelligence as organized gaming competitions among professional players and teams. Although esports gained significant coverage and viewers during the pandemic, while in-person sporting events were on hold, the industry is now going through a cooling period.
Major organizations, such as 100 Thieves and Team SoloMid, are undergoing layoffs, while viewership for some of the industry’s biggest games, such as League of Legends, is at a five-year low.
The industry downturn has also occurred hand-in-hand with a slightly slower creator economy. Streamers on Twitch, the most popular platform for live video game broadcasts, have reported slowdowns in subscriptions, and creator-focused platforms like Patreon have undergone several rounds of layoffs.
Similarly, online gaming platform Roblox released its November 2022 figures, revealing slower growth and a decrease revenue per daily user. Its shares have dropped 74% in 2022—the result of not being able to keep up the momentum it saw in wake of the pandemic.
Esports viewership will still grow in 2023, which in turn will cause advertising revenues to grow 10% to $264.3 million this year. But despite staying in the green, the still-niche space will become less of a priority for advertisers who are more wary of spending.
Video Gaming Industry Forecast for 2023
Between rapidly improving tech and massive mergers, gaming is changing.
Microsoft’s attempt to acquire Activision Blizzard in what could essentially create a video game monopoly has many, including the Federal Trade Commission, keeping a close eye on the gaming industry. The $68.7 billion acquisition would give Microsoft a leadership position with franchises like Call of Duty, Candy Crush Saga, World of Warcraft, Diablo, and Overwatch.
Other major media powerhouses such as Netflix are investing in the gaming industry, too. Netflix is adding two more games (Kentucky Route Zero and Twelve Minutes) to its platform, bringing the total number of games available on the service to 48. These games are free to Netflix subscribers, yet less than 1% of them—or 1.7 million people worldwide—play its games on a daily basis.