The last 12 months have been difficult for many, but for the gaming and gambling industries 2020 has been a good year for growth. As people have seen their real-world interactions curtailed and social events cancelled, both gaming and gambling have been popular options to find entertainment and excitement online for millions of people around the world.

Games industry growth

According to a recent report by Newzoo senior market analyst Tom Wijman, the global gaming market will have grown 9.3 per cent in 2020 with revenues reaching $159.3 billion (£118.75bn). And with analysts predicting the industry to surpass $200bn in revenue by 2023 and $250bn by 2025 there are good reasons for those in the gaming sector to feel optimistic for the years ahead.

One of the most significant of these has been the emergence of cloud gaming. Several services from companies like Onlive, G-Cluster and StreamMyGame have started to offer this service and games developers including Atari, Sega and Disney Entertainment have been quick to start providing games to stream.

Then there is the arrival of the new subscription model of gaming with both Apple and Google getting in on the action with their Arcade and Stadia respectively. Because players do not need to make any commitment to buy and own expensive games, or even the special hardware to play them on, it has an obvious appeal.

It is also a business model that has been tried and tested by other entertainment providers from Netflix to Spotify, and we have seen how successful they have been. The games industry is already larger than the global film industry and music industry, and if cloud gaming takes off it could be larger than both combined within only a few years.

Gambling industry growth

Gambling firms have also seen significant growth throughout 2020. As the pandemic confined millions of people to their homes on nights where they would otherwise be going out in search of fun and excitement, many turned to online gambling. The online gambling industry has grown 13.2 per cent this year, from $58.9 billion in 2019 to $66.7 billion in 2020.

However, not all online gambling operators have fared equally. Whilst sports betting saw drop off in revenues as sporting fixtures were cancelled, online poker has been one of the major drivers of this new growth, with the phrase “how to play poker” seeing a 200% rise in Google searches between March and April as the pandemic took hold.

Prior to the events of this year, poker was already seeing a second wave of popularity online as a result of a relaxation of gambling laws, and significant efforts to make the game more accessible. For example, almost all the leading poker platform now allow players to practice their skills for free before they start playing for money, which has proved successful in attracting new players to the game. Most poker sites also have extensive banks of information and strategy advice so players can pick up tips that might not be available elsewhere. They also offer a wide range of different variants on the game to suit all tastes. For instance, many offer 3 card poker which is a great way to get a feel for how to bet, and how to bluff, before moving on to the more complex versions of Texas Hold’em and Stud.

However, it is not all newcomers to the game that have been boosting the revenues of online poker sites. An increasing number of pros and semi-pros are also believed to be signing up, and enjoying the ease with which mobile gamming has reduced the friction to playing and made online poker a more pleasurable experience.

Gaming and gambling collide

As the gaming industry has exploded in recent years, it has also started to overlap with various other forms of entertainment. We have seen television and films spin-offs for decades, from box office hits like Lara Croft: Tomb Raider to the less critically acclaimed Sonic the Hedgehog movie, but beyond that we have also seen games cross into the music world with Guitar Hero, or most recently gambling with Grand Theft Auto’s Diamond Casino and Resort.

Within the popular crime-based action-adventure game, Diamond Casino offers players both a new storyline, but also fully playable casino games, from roulette to blackjack, to enjoy. As with every new Grand Theft Auto release, the casino caused significant controversy amongst certain sectors of society, but it has been welcomed by players around the globe and helped make GTA the second biggest selling game ever, with more than 135 million units sold.

Loot boxes have also been a controversial overlap between video games and gambling. They offer players the opportunity to win a randomised reward when opened, and can often be bought for real money and traded – making them a feature described by many legislators around the world as gambling. Game developers often disagree, but a number of governments around the world have passed laws which treat them as if they were gambling, with the same limits and protection measures in place.

Gambling firms too, have been taking elements from video games to improve their titles. After the success of networked multiplayer video games, the casino industry rolled out digital versions of poker and blackjack where players could compete against one another online. And social gaming features, which offer players a way to communicate with each other throughout a game either through messaging or audio, have also made the shift from video games to online casino titles.

Going mobile

The inexorable rise of mobile gaming has also had a huge role to play in the growth of both industries. In America alone, around 200 million people now play games on their mobile devices, a fact that has made the gaming industry start to take mobile very seriously indeed.

As a result, the games are becoming more complex and sophisticated with many console games like the hugely popular Call of Duty now available in mobile form. And with 5G mobile tech gradually being rolled out, the possibilities are going to grow and grow. So, we can probably expect the number of players on mobile devices to do the same.

However, the rise of mobile does not mean the end of the console. With new models from Sony and Microsoft launched just in time for the holiday season, and few players put off by their £500 price tag, they will contribute to the gaming industry’s profits into 2021 and beyond.

The future may be virtual

Looking ahead, there are two exciting prospects for both the gaming and the online casino industry in the form of virtual and augmented reality. These promise to be real game changers that will draw in more players, but neither has quite caught on yet. However, as the technologies continue to improve at a rapid rate, both could offer significant new revenue opportunities for both industries. 202 was a big year, but with these new technologies on the verge of becoming mainstream, the next decade could be even better.

 

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