DFC Intelligence predicts 2016 game software sales to reach $79 billion. This is 8% higher than 2015.

  • Video Game Software Sales will be $98 billion in 2020
  • The market is seeing a CAGR of more than 5 percent
  • The PC Game Market in Asia, North America and Europe will grow to $40 billion by 2020
  • The PC Game Market in Asia, North America and Europe was $30 billion in 2015
  • TrendForce predicts that Virtual Reality (VR) hardware and software will be a $70 billion market in 2020
  • VR hardware will account for $20 billion in 2020
  • VR software will account for $50 billion in 2020
  • TrendForce predicts the VR market in 2016 will be $6.7 billion

IEShepra Opinion: With the recent announcement of the Oculus Rift at $599, it seems like Facebook may be giving Sony an unintended lead in VR (See Microsoft giving the lead to PS4 because of their always-on technology) by not realizing this type of hardware would greatly benefit from a razor blade model. The software is where the real money is and the distribution platform for that software could results in Billions of dollars of annual revenue.

Look at Steam and their $3.5 Billion in retail sales for 2015 and remember their 30% revenue share – that’s $1.05 Billion to Steam for having 15% of the PC game distribution market.

My own assumptions are that at $299, Oculus would dominate the market and increase the adoption speed by an order of magnitude. The revenue potential is in the Billions if they have aspirations of becoming the Steam of VR.

Now, considering that 15% (equivalent to Steam’s percentage of the PC game market) is a reasonable target for Oculus within 5 years, Facebook has a potential distribution platform worth $7.5 Billion in revenue in 2020..

My assessment is that Facebook has bought into something pretty huge. Disclaimer: I do not own FB stock.

A lower price point accelerates the model, but FB should be fine either way, as long as they own the distribution channel.

I get asked a lot about what the best format is for a company presentation in the games industry. So, after doing a few hundred of these over the past few years, I’ve pulled together a template that gives studios a recommended outline and order for this.

As part of this, there’s also a template for pitching a game. If you just need a company deck (not for investors – you need financials), just leave off the game pitch section.

India is clearly the next untapped market for games. I’ve heard a lot of interesting figures lately, but the market is dominated in the mobile space by Android at around 73 percent of the addressable market. I’ve also heard that India is also more accustomed to subscription based games and micro-transactions are something they are getting more comfortable with, so expect micro-transaction models to grow. Other interesting data includes:

  • The market for Digital Games in India is $853.9 Million in 2015
  • Mobile is 49 percent of the market, or around $416 Million today
  • Mobile is growing at a 64 percent growth rate year-over-year
  • By 2015, the mobile market for games in India is expected to be around $832 Million
  • There are approximately 185 Million mobile gamers in India in 2015
  • ARPPU in India for mobile games in October 2015 was $13.07 with a 1.53 percent conversion rate from player to payer
  • Digital console is 2.7% of the market today
  • MMO games are 28 percent of the market, with Free-to-Play MMO games comprising 21 percent of the total market
  • Cost-per-install in India is $0.74 for Android
  • Cost-per-install in India is $1.26 for iOS

According to the Game Publishers Association, China (GPC):

  • China had 517 million gamers as of this time last year
  • 147 million of those players are core gamers
  • There were 358 million mobile gamers in China in 2014
  • The U.S. is now the top market by revenue for mobile games

According to Global Mobile Game Confederation (GMGC):

  • China will become the largest market for mobile games in 2016 with estimated revenue of $7.7 billion
  • The U.S. will reach $7.3 billion in mobile game revenue in 2016
  • The mobile game market in China will reach $9.3 billion in 2017
  • The mobile game market in the U.S. will reach $8.2 billion in 2017