By Julia Lundstrom, CFP® | The Traders Wire
2020 and 2021 were both great years for the gaming industry. We saw immense growth in sales, usage rates, and revenue across all boards. During those years, the gaming industry generated $155 billion in revenue.
It’s estimated that by 2025, the industry will generate more than $260 billion in revenue. That said, some of the largest companies in the world are looking for ways to get involved in this revenue stream. Tech giants such as Google, Meta, and Apple, have all made plans to enter the video game industry one way or another.
This optimism has met recent tailwinds as sales slid in the second quarter of the year. Over the past three months, Microsoft, Sony, and Nintendo have all posted disappointing results in their respective gaming businesses.
The numbers reflect a broader contraction in consumer spending on video games. This was expected considering that the boom of video games was caused by the pandemic. As we return to the real world, it’s understandable that people would have had less times for video games.
Challenge: Attacks on User Data
Web application attacks within the gaming sector have only grown by 167% from Q1 2021 to Q1 2022, according to new research from Akamai.
With companies continuing to migrate their operations to the cloud, there are significant security gaps that are left wide open for attacks by hackers.
With the microtransaction market continuously growing to reach over 100 billion by 2026, a massive target is placed on their backs.
Challenge: Console Shortages
A major factor that hampers the performance in the game manufacturing world is the continued scamble for console hardware. With supply chain shortages being the story of the year of 2021.
With the lockdown in the world’s most crucial manufacturing hub, Shanghai, there’s not much they can do about it.
Opportunity: Immersive Gaming
If there’s one good thing that came out of this, it’s that technical innovations have only moved forward for the future. Oculus, for one, is working extremely hard to improve the quality of their virtual reality headsets before they release it.
As far as immersion goes, video games are way ahead of the entire entertainment economy. Further experimentation is being done with controls, adding voices, and touchscreens to have a better gaming experience.