The technology sector has been one of the top-performing over the last 30 years. We’ve gone from computers being huge machines that required multiple people to operate, to tiny devices in the palm of our hands. The technological advancement has been tremendous.
The games industry has been propelled by such technological advancements, growing into the multi-billion-dollar industry that we all know today.
The games industry has since broadened into multiple different verticals from the likes of free to play mobile games, the console hardware market, and newcomers like VR and AR.
Despite the many advances, it stays true to its roots - providing entertainment through technology. So, why should you invest in the games industry?
As of 2019, there are more than 2.5 billion gamers in the world. This in turns generates a $152.1 billion market value, which is an increase of 9.6% year on year. Just to put that in perspective, Music industry 3.5% YoY and Cinema 4.7% YoY.
The trend is expected to continue in 2020 despite the Covid-19 situation, reporting an estimate of 2.7 billion users, $159.3 billion in market value and an increase of 9.3% year on year. The market is also on track to surpass $200 billion by 2023 and we believe it may come earlier with the introduction of PS5, Xbox series X and the ever-increasing technological advancement.
On a more regional note, Asia-pacific is said to account for 55% of the global games market with South East Asian market generating $4.3 billion in revenue in 2019, a +13.9% year on year growth. The rise of gamers in the region is partly driven by the improvement of the internet infrastructure in the region, a lower barrier of entry to games, as well as the regional popularity of esports.
Singapore, despite its small size, contributed $327.2 million in revenue in 2019, proving itself as a key player in the regional games market.
The lucrative market size and the huge amount of gamers in the world provide lots of opportunities and various avenues for investors to invest in the games industry.
The ever-increasing amount of gamers is accompanied by an increasing amount of games being released. The number of games released on Steam has increased from an average of 600 games per month in 2017 to an average of 700 games per month in 2019.
Despite the seeming glut of games, the revenue of each game sold is also rising. Both the number of games that has an estimated lifetime revenue of more than $250,000 and more than $1,000,00 has seen an increase year on year. This presents many lucrative opportunities.
This huge market size combined of the industry as a whole, combined with the rising revenue of games creates a plethora of opportunities for investors. Alas, much of the market is inaccessible to investors aside from a few public companies. Alternative ways to get into the market include gaming VCs and private equity.
This, in turn, poses a huge question: How can investors access this market? What and how should they invest?
Here at the Iterative Indie Games Fund, we capitalize on an often-overlooked section of the gaming industry, indie games. We believe that indie games, with a little guidance and support, can be extremely lucrative.
Find out more about why we choose to invest in independent games instead of more popular free-to-play games here: https://iterative.fund/blog/why-indie-games
If you’d like to find out more about the Iterative Indie Games Fund, fill out our contact form here and we promise to get in touch:
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