NewZoo has put out some great infographics over the past several months forecasting 2018 game revenue, and it felt like time to do something with the data they have given out for free. They listed 2018 projected revenue by country and the gamer population for each of the top 13 countries in terms of market size, China, USA, Japan, South Korea, Germany, UK, France, Canada, Spain, Italy, Russia, Mexico, and Brazil.
Since we’re never content to just know the size of the market, we played with the data a little more to get the annual projected revenue per player in each of the countries. We even broke it down to a daily average per player. Of course we don’t have the numbers on what percentage is paying in each country, but these numbers should help define the ballpark size.
According to Newzoo, the top 100 countries in the world by game revenue includes:
1.7 billion gamers
$81.5 billion in revenue for 2014 this year
The US is the top country for game revenue in 2014 at $20.5 billion
Japan monetizes the most per person online at $120.20
I ran the numbers differently than they did. You can see the ranks of game revenue by country on the left, but I chose to look at it differently. I divided the revenue by the online population of each country. This gave me the RPPO (Revenue Per Person Online) – since I figure this is a good gauge of technology and that these people are also likely playing on mobile devices. Then I ran the ARPD (Average Revenue Per Day) based on that number divided by 365. It results in some interesting data.
For me, this is most interesting for geographic (soft) launches of mobile games. If we can look at how a game monetizes in specific country or two, we can make a more educated guess about how it might monetize given the propensity to spend per country. Of course it isn’t flawless, but it sure does give an interesting set of benchmarks to measure against. Here’s the full list.
According to the Interactive Skills Integration Scheme (ISIS), which is funded by Australia’s Department of Education, Employment and Workplace Relations, Australia has:
931 full-time developers
126 studios around the country
This is a major decline from 2008 when the country had more than 2,000 game developers working in the industry. ISIS project director Justin Brow attributed part of the decline to the work for hire market drying up and projects going internal at most of the publishers.
The country had focused on very few original IPs on console platforms, but has had success on iPhone with Firemint and Half Brick leading the pack.
Countries looking to get their fair share of the market need to consider a few things:
1) If you compete on price for work-for-hire projects, it should be a transitional period to build skill sets and experience towards developing original IPs. Most countries have rising labor costs as skills are acquired and experience gained among the workforce. This advantage is lost as the next country competes on price as it builds its workers’ skills.
2) Canada, with its tax incentive programs, is the #1 competitor to all countries with a trained and skilled workforce in the creative media industries. When the price is subsidized and the geographical location is more favorable, it’s impossible to compete. You can’t move geographically, but you can subsidize a worthwhile industry that will bring in tax revenues in excess of the incentives. The long-term training of the indigenous workforce is also a major benefit of these programs.
3) The barrier to creating a game and commercializing it is almost non-existent today. The barriers to getting a wide audience are making a quality game and finding the channels for distribution and awareness building. Marketing tends to be a black art among many developers, but it really needs to be a consideration early in the development process. Governments can support their creative industries by providing training on marketing and distribution, as well as general business administration and economics skills. These are essential for any business and don’t have to be industry specific.
4) A healthy games industry means more skilled knowledge workers which boosts tax revenues and average household income. These reflect positively upon a government when it is creating and supporting higher paid jobs and building a larger tax base. The most successful example of this is of course Canada. Everyone should follow Canada’s lead to some degree.
According to the Electronic Software Association of Canada (ESAC), there are currently 14,000 people directly employed by more than 247 Canadian video-game companies. This doesn’t include transportation and retail employees. Canadian videogame developers hope to add 29% more employees by 2011. In Canada:
According to the third annual Game Developer Census by Game Developer Research, which covers North American game companies, the games industry employed 44,806 people in 2009. This is an increase of 406 jobs over the 2008 estimate (44,400). Other key points include:
Canada now employs 12,480 people in the games industry
In 2008, Canada employed 9,500 people in the games industry
California has 20,815 developers (46 % of the U.S. total)
Washington has over 4,500 game industry employees
Texas has over 2,600 game industry employees
8 states (California, Washington, Texas, New York, Massachusetts, Illinois, Florida, and Maryland) have more than 1,000 working game industry professionals
Game tools companies, game contracting/services companies, external PR, marketing, legal, and other business services, and liaison or licensing divisions at larger media companies are not included in the census, however Game Developer Research estimates this number at around 18,000 across North America.
The’Game Developer Census 2009‘has data on more than 700 game development companies in North America and is now available as a paid digital download for $2,495. Any questions about payment, delivery methods, or further licensing of the data can be directed to Game Developer Research at firstname.lastname@example.org.
The OIDMTC, calculated as 40% of eligible Ontario labor expenditures
A work-for-hire tax credit rate of 35% on qualifying expenditures incurred after March 26, 2009
There is no limit on the amount of eligible Ontario labour expenditures which may qualify and there are no per project or annual corporate limits on the amount of the OIDMTC which may be claimed.
Eligible marketing and distribution expenses are capped at $100,000 per eligible product
It looks like Ontario is making the right moves to give its developers the ability to grow both their original IP and work-for-hire capabilities and I’m sure we’ll see more large companies moving into the province.
The Provincial government of Ontario will invest $263 million over the next decade according to the National Post. This is in addition to Ubisoft’s commitment of $500 million over the same time period. The studio is expected to create an additional 800 jobs in the province.
One of the issues that studios are running into in Canada is the high cost of new hires. While this is offset by generous government subsidies, the technical programs at the universities are almost fully subscribed and the graduating class is almost entirely placced prior to graduation.
Bringing in developers from the rest of the world has raised the cost of new hires in recent years, however the government support continues to make certain provinces (Quebec and now Ontario) some of the most desirable places to develop AAA-Quality games in the Western World. This new commitment by another Canadian province is sure to set off additional debate in Canada from British Columbia’s game development communit as it is difficult to compete even on an intra-provincial level without comparable government support.