Video Game Development in 2024: Industry Analysis and Market Growth Prospects
Overview
The video game industry has seen massive growth over the past decade, evolving from a niche market into a mainstream form of entertainment that rivals Hollywood. As we look ahead to 2024, the industry is poised for continued expansion across console, PC, and mobile platforms.
Key Video Game Industry Trends in 2024
Several key trends are shaping the video game industry landscape for any video game development company in 2024:
Transition to Digital Downloads
The transition from physical to digital game sales will accelerate, with over 90% of console and PC game sales happening via digital downloads by 2024. This shift enables more indie titles to reach gamers directly.
Cloud & Streaming Services Growth
Cloud gaming services like Google Stadia and Microsoft xCloud will see expanded catalogs and increased consumer adoption by 2024. 5G networks will provide the infrastructure for streaming games on mobile devices.
The installed base for Virtual Reality (VR) and Augmented Reality (AR) headsets will grow substantially by 2024. Improvements in hardware capabilities and content libraries will drive mass market acceptance.
Games utilizing live service models that provide frequent content updates will constitute most of industry revenue. Multiplayer experiences with social engagement and in-game purchases lead to this trend.
Regulation & Monetization Scrutiny
With growth comes increased scrutiny. Expect tighter regulation around loot boxes, addiction concerns, and data privacy. Developers considering how much does it cost to make a video game will need to consider monetization strategies carefully.
Video Game Platform Outlook for 2024
The video game platforms projected to lead industry growth in 2024 include:
- Mobile gaming will top $98 billion in revenue by 2024. Improved smartphones combined with 5G connectivity accelerate the market.
- Key genres like multiplayer RPGs, location-based AR games, and instant-play hypercasual games will see strong engagement.
- The PlayStation 5, Xbox Series X|S and Nintendo Switch will comprise the console market. Combined they will approach $30 billion in yearly revenues.
- Flagship franchises like Call of Duty, FIFA(EA Sports FC), and Animal Crossing will drive console software sales. Indie titles will also see success via digital storefronts.
- Gaming PCs and laptops will approach 100 million active users by 2024. This enthusiast market spends heavily on cutting-edge hardware and supports emerging genres.
- Free-to-play & indie darlings like Minecraft, Roblox, and Rust will continue leading on PC. eSports & modding also maintain loyal followings.
- Cloud gaming services will surpass 30 million subscribers globally by 2024. 5G mobile infrastructure enables mainstream adoption.
- Deep-pocketed competitors (Google, Microsoft, Amazon) see cloud gaming as a gateway to interactive entertainment’s massive addressable market.
Video Game Genres & Trends to Watch
Action-Adventure
Action-adventure games that combine combat, exploration and puzzle-solving mechanics within an expansive world continue to captivate audiences. Franchises like The Legend of Zelda, God of War, and Horizon showcase the genre’s potential for storytelling and gameplay innovation. Expect boundaries to be pushed further as next-gen consoles usher in bigger, more detailed worlds. Open-world co-op also unlocks new possibilities for socially connected adventures.
Shooters – Competitive & Cooperative
The shooter genre drives some of gaming’s most engaged fanbases across PC and console platforms. For competitive first-person shooter (FPS) experiences, Riot Games’ upcoming “Project A” has many anticipating the next evolution of tactical 5v5 gameplay. Cloud gaming also enables massive-scale battle royale shooters by removing hardware barriers. On the cooperative front, sci-fi loot shooters continue to thrive, with Bungie’s Destiny 2 and Gearbox’s Borderlands leading the way.
Sports Games
Sports games continue to have global appeal, and 2024 will see incremental improvements to fan-favorite franchises like FIFA, Madden NFL, NBA 2K, and MLB The Show. As console horsepower increases, so does sports game realism. Key areas of focus include gameplay physics, lifelike animation, photorealistic visuals, and expanded multiplayer features. Cloud gaming integration also enables new concepts like cross-platform multiplayer and shared persistent leagues.
Role-playing games (RPGs)
RPG fans are eager for sequels to hits like The Witcher, Starfield, Final Fantasy XVI and Dragon Age. These games emphasize progression, customization, and decision-based narratives. The genre also continues to branch out across action RPGs, tactical RPGs, massively multiplayer online RPGs (MMORPGs), and more. Mobile has fostered RPG innovation via gacha game mechanics, which Genshin Impact has popularized. Cloud gaming provides the infrastructure for smaller developers to create the next RPG breakout hit.
Simulation & Builder Games
Simulation games let players manage intricate systems, while builder games offer creative tools to construct personalized worlds. Franchises like Cities: Skylines, Planet Coaster, Farming Simulator and Microsoft Flight Simulator showcase ever-increasing levels of detail and complexity. Sandbox creators like Minecraft and Roblox have cultivated highly engaged communities centered around user-generated worlds. Auto racing simulators continue pursuing ultra-realism across virtual reality platforms. As creation tools improve, expect more breakout hits in this inventive genre.
Fighting Games
The fighting game community continues to thrive thanks to content-filled franchise iterations like Tekken, Street Fighter, and Super Smash Bros. and indie darlings such as MultiVersus. Tournament streams also draw engaged spectators. Looking ahead, cloud gaming can reduce input lag, enabling precise timing-based combos. Cross-play matchmaking expands the pool of competitors. Free-to-play business models help attract newcomers and cultivate the next generation of fighting game enthusiasts.
Survival Horror
Many gaming veterans have fond memories of classic survival horror franchises like Resident Evil, Silent Hill, and Fatal Frame that emphasized tense exploration, puzzle solving, and resource conservation using limited tools to overcome terrifying enemies. New titles continue to innovate, with breakouts like Five Nights at Freddy’s showing the genre translates well to mobile platforms. The persistent popularity of multiplayer horror experiences like Dead by Daylight also illustrates opportunities to add communal elements to the traditionally solitary genre.
Platformers
Platformers represent gaming’s roots, with Mario and Sonic the Hedgehog still among the medium’s most recognizable icons. Beyond nostalgia, the genre maintains a healthy following today thanks to family-friendly series like Ratchet & Clank, Spyro, and Crash Bandicoot. Challenge-seeking veterans flock to precision platformers like Celeste and Cuphead. Cloud gaming showcases promise for creating massive interconnected worlds that players can platform through seamlessly. And the genre translates well to both 3D and 2D experiences across game consoles, PC storefronts, and mobile app stores.
Analysis of Key Video Game Industry Segments in 2024
Below, we analyze the growth trajectories for key video game industry segments leading up to 2024.
Console Gaming
Dedicated video game consoles remain a pillar of the gaming industry, delivering cutting-edge AAA gaming experiences in the living room. In 2024, Sony’s PlayStation 5, Microsoft’s Xbox Series X|S, and Nintendo Switch will comprise the console market. Strong sales of first-party games, expanded digital offerings, and subscription services will also bolster their ecosystems. Backward compatibility further incentivizes console gamers to upgrade while carrying their libraries forward. Key questions center on the sustainability of hardware supply chains and consumer appetite for incremental console refreshes.
Install Base Growth
PlayStation 5 – Over 56 million units globally by the end of 2024 based on supply improvements. Franchises like God of War, Spiderman, and Horizon are leading software sales.
Xbox Series X|S – Projected 25+ million install base between Series X and lower cost Series S SKU. Game Pass subscription service plus Activision Blizzard acquisition bolsters the content lineup.
Nintendo Switch – Potential 140+ million cumulative sales life-to-date. The new Switch model could spur hardware sales, but it is highly dependent on supply chain conditions. Flagship series like Zelda, Mario, and Pokemon are driving interest.
Business Model Evolution
First party studios and exclusive titles have historically been console maker advantages. However, Xbox Game Pass along with Sony and Nintendo’s expanded digital offerings are shifting business models. Key revenue growth now coming from subscriptions, digital content sales, and add-on in-game purchases. Profit closely tied to growing install bases and increasing engagement.
PC Gaming
Gaming PCs offer unmatched versatility, upgradability, control options, and performance potential compared to consoles. The platform drives innovation across competitive esports and supports emerging genres ignored by traditional publishers.
Surging Demand for Gaming PCs/Laptops
Gaming PC and laptop adoption continues to accelerate thanks to remote work and education trends. NVIDIA RTX GPUs also deliver ray tracing visuals and AI-enhanced graphics. This enthusiast market spends heavily on cutting-edge hardware and supports niche genres. Expect over 100 million active PC gamers by 2024.
Fostering Creativity via Indies & User-Generated Content
Grassroots early access titles continue disrupting gaming’s status quo, as community feedback helps shape development. Established PC franchises also benefit from modding and custom content. Expect the PC platform to continue driving creativity thanks to its flexible open ecosystem.
Mobile Gaming
Thanks to global smartphone penetration, mobile gaming has exploded over the past decade. Consumers turn to mobile for instant-play gaming enjoyment across casual, mid-core and hardcore experiences.
Key Mobile Gaming Revenue Growth Drivers
- Rapid smartphone tech improvements combined with widespread 5G rollout.
- Maturing cloud gaming infrastructure expands the scope of mobile game concepts.
- Instant-play hypercasual games capture interest with minimal time commitments.
- Midcore RPG, strategy and simulation games offer depth for dedicated gamers.
Evolution of Monetization Models
- Free-to-play experiences generate revenue from ads and in-game transactions. Successfully balancing fairness and revenue.
- Battle pass models provide tiered rewards to satisfy both casual and highly engaged player bases.
- Hybrid ad-supported options appeal to price-sensitive users. Limited ads enable lower in-game purchase pressure.
Platform Powerhouses Driving Discoverability
For mobile developers, standing out among millions of apps is a constant challenge. Large platform holders (iOS App Store, Google Play) continue gaining leverage based on their distribution power. However, third-party stores and sideloading workarounds give Android game developers more options to reach users.
Virtual Reality (VR) & Augmented Reality (AR)
- VR headset install base is expected to surpass 30 million globally by 2024.
- Continued improvements to visual fidelity, input systems, form factors and haptic feedback.
- Key questions center on sustaining user engagement beyond the hardware novelty phase. Needs continued content investment.
- AR enables game integration with real-world environments. Tremendous potential as headsets mature and 5G infrastructure expands.
Video Game Industry Analysis Summary
The video game industry continues to expand, with expectations of even more growth in console, PC, and mobile gaming up to 2024. Some of the drivers of growth include advancements in internet technology that support cloud gaming, gradual enhancements in gaming hardware, and the immense market for interactive entertainment across current and future genres.
Since gaming is becoming more prominent in popular culture, attention will remain focused on issues related to addiction, revenue generation and other social effects. Managing the inevitable changes in regulation while maintaining investors’ trust will be crucial for the long-term success of leading video game companies.
Market Growth Prospects for Video Game Industry Segments
Based on the above analysis, here we forecast growth prospects across major video game industry segments for 2024:
- Industry Segment Revenue in 2024 – $102 billion
- Annual Growth Rate from 2019 – 10% CAGR
Key Growth Factors:
- Expanding smartphone penetration globally
- Cloud gaming infrastructure improvements
- Instant bite-sized entertainment appealing to the mass market
- Industry Segment Revenue in 2024 – $56 billion
- Annual Growth Rate from 2019 – 4% CAGR
Key Growth Factors:
- Early days for PS5 & Xbox Series X|S hardware sales cycle
- Digital transition expanding content sales and services
- Industry Segment Revenue in 2024 – $30 billion
- Annual Growth Rate from 2019 – 4% CAGR
Key Growth Factors:
- Surging gaming PC and laptop adoption
- Innovation led by indie developers and user-generated content
- Industry Segment Revenue in 2024 – $22 billion
- Annual Growth Rate from 2019 – 25% CAGR
Key Growth Factors:
- Expanding high-end VR headset install base
- Persistent consumer interest in premium immersive experiences
Final Thoughts on the Future of Video Game Development
The video game industry is not showing any signs of slowing down as the total addressable market increases across all age groups and regions, as well as improvements in the underlying gaming technology. However, increasing costs of developing high-quality games also pose a threat if people get tired of sequels.
The cloud gaming infrastructure and indie developers’ imagination are two things that can pose a serious threat to the incumbents. However, constant consumer interest in interactive entertainment, regardless of the economic climate, shows that the gaming industry is indeed very viable during such times.
In conclusion, video game publishers must go on maintaining the right balance between the changes in business models, new platforms and the consumers’ demands in order to maintain the growth rate through 2024 and beyond. But the future still looks bright for those companies who are using this gaming technology to bring people together and to inspire the world.
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