Video games software market on track to break $200bn barrier

The global video games software market continues to post incremental annual expansion, generating close to $180 billion at retail in 2023. Despite a number of barriers to growth, a new report from Futuresource Consulting reveals a positive future, culminating in a market value of $200 billion in 2028.

“We’re seeing a general tightening of wallets across many parts of the consumer electronics waterfront,” says Arian Bassari, Lead Analyst, Futuresource Consulting, “but that doesn’t mean gaming software is dead in the water. And while its hardware counterpart is experiencing strong growth, particularly from consoles, software value will continue to trend upwards at a more sedate pace.”

Digital content rules the roost

“The rise of digital content persists,” says Bassari. “It accounted for 94% of software revenue in 2023, while physical full-game content is receding in the rear-view mirror. However, there is a bright spot surrounding the PS5, which maintained significant sales of physical releases.”

Subscription gaming on the up

Subscription gaming is also making strong progress, accounting for 16% of software revenue in 2023, which represents 5% year-on-year growth. Futuresource notes that the wide range of titles available on services such as Game Pass and PS Plus, combined with the relatively low outlay, makes these services an attractive option during times of economic uncertainty.

Looking to the PC market, subscription gaming commands a powerful presence. It is the biggest sub-category for the platform, and accounted for 43% of total PC software revenue last year. With a range of players in the market, including Game Pass, NVIDIA GeForce NOW, Ubisoft + and Apple Arcade. It’s a high-profile, dynamic and competitive market, providing consumers with a choice of services to enjoy.

Smartphones pushing tablets out of the frame

In mobile gaming, smartphones captured more than 90% of total spend. Futuresource expects this trend to continue across the forecast period, eroding tablet gaming’s share even further.

“Tablets are really struggling to prove their worth to the wider audience of gamers,” says Bassari. “Combine this with the industry’s focus on mobile gaming offerings and further optimisation of smartphones for gaming, as seen in the recent iPhone 15s, and the stage is set for an almost total smartphone takeover.”

Futuresource Consulting’s Global Video Games Software Market Outlook report analyses the gaming software market, while providing commentary on the hardware market for context. For more information on this report or to make a purchase, please contact Leon Morris at leon.morris@futuresource-hq.com.

About the author

Arian Bassari

Arian joined the Gaming team at Futuresource in 2021 as an analyst, where he conducts research to understand market dynamics and provide data-driven insights.