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Newzoo forecasts 2020 global games industry will reach $159 billion


Newzoo forecasts 2020 global games industry will reach $159 billion – TechCrunch

Games and esports analytics firm Newzoo released its highly cited annual report on the size and state of the video gaming industry yesterday. The firm is predicting 2020 global game industry revenue from consumers of $159.3 billion, a 9.3% increase year-over-year. Newzoo predicts the market will surpass $200 billion by the end of 2023.

Importantly, the data excludes in-game advertising revenue (which surged +59% during COVID-19 lockdowns, according to Unity) and the market of gaming digital assets traded between consumers. Advertising within games is a meaningful source of revenue for many mobile gaming companies. In-game ads in just the U.S. drove roughly $3 billion in industry revenue last year, according to eMarketer.

To compare with gaming, the global markets for other media and entertainment formats are:

Counting gamers

Of 7.8 billion people on the planet, 4.2 billion (53.6%) of whom have internet connectivity, 2.69 billion will play video games this year, and Newzoo predicts that number to reach three billion in 2023. It broke down the current geographic distribution of gamers as:

  • 1,447 million (54%) in Asia-Pacific
  • 386 million (14%) in Europe
  • 377 million (14%) in Middle East & Africa
  • 266 million (10%) in Latin America
  • 210 million (8%) in North America

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Weu2019re less than a month away from launching TC Early Stage 2020, our interactive online bootcamp, that runs July 21-22. Donu2019t miss out on more than 50 expert-led workshops focused on the core subjects every early-stage startup founder needs to ace. But hold up u2014 today is your last chance to score an early-bird deal. 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to open a game studio”,”content”:{“rendered”:”

With the game industry booming, more entrepreneurs are evaluating where to base their new startup or open a new office for their existing company. The U.S. government’s block on H1-B and L-1 visas will encourage American game startups to add an office abroad much sooner than they otherwise would have. But where?n

This spring, I surveyed a number of gaming-focused VCs about which cities are the best hubs for game studios targeting the Western games market. Several locales stood out as heavily recommended u2014 which Iu2019ve shared below u2014 but the most interesting takeaway was the lack of consensus.n

Game studios are far less geographically concentrated than other categories of VC-backed startups. While there are odes on Twitter and conference stages that u201cyou can build a successful startup anywhere,u201d most investors will push founders to locate themselves in the SF Bay Area, or at least in LA, NYC or London. Meanwhile, the most common piece of advice from those I spoke to: You should probably not base a gaming startup in the San Francisco Bay Area.n

Access to the right talent is the top priority, as is the ability to retain them. Proximity to investors matters, but a successful game quickly turns a profit, which reduces the need for outside funding beyond Series A (and U.S. and European VCs who focus on gaming tend to be very international in scope). Quality of life, ease of obtaining visas and access to strategic partners all play into the decision as well and will weigh these recommendations differently depending on who you are and the games youu2019re developing.n

Three notes:n

    n

  • I focused on qualitative research, gauging the assessments of top investors who track new startups in the sector about where the action is right now.u00a0n
  • The scope of this survey is limited to studios targeting the Western gaming market, so leading hubs in Asia werenu2019t included.n
  • I group cities by metropolitan area so, for example, San Francisco includes Redwood City and Seattle includes Bellevue.nn

    North American

    In North America, Los Angeles is the clear favorite with Montreal, Seattle, San Francisco, Toronto and Vancouver all receiving many endorsements as the other top hubs. Regarding cities with the most interesting gaming startups recently, Ryann Lai of Makers Fund said, u201cIt is hard to name a single best location, but Toronto, Culver City (in Los Angeles), Orange County (next to Los Angeles) have gotten increasingly popular among gaming founders lately.u201d



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