Video games commerce company Xsolla has released the winter 2024 edition of its State of Play Industry Report, breaking down the current state of the global gaming market.
The report covers revenue trends, platform shifts, and what's coming next for the industry. Here's what matters for gaming and web3.
Berkley Egenes, Chief Marketing & Growth Officer of Xsolla, said: "As we unveil The State of Play Winter 2024 Edition, it's clear the gaming industry is navigating a transformative era. This report, rich with data and insights, is a testament to our commitment to empowering developers and industry stakeholders."
Mobile takes 72% of game revenue
Mobile gaming pulled in 72% of total game revenues in 2023. That's not a small lead — mobile is the dominant platform by a wide margin.
Total sales and user count both climbed when comparing 2020-21 to 2022-23, up 44% and 22% respectively. Growth has slowed slightly, but the numbers still show a market that's expanding.
Gaming revenue projected to hit $363 billion by 2027
The report expects gaming revenue to grow 9.4% in 2023, then maintain an 8.7% annual growth rate through 2027. If that holds, the industry reaches $363 billion by 2027.
That growth rate beats the broader entertainment sector, which is tracking at 2.8% year-on-year.
Xsolla draws a comparison between gaming and e-commerce. Both sectors leaned into digital payments during the pandemic. E-commerce changed how people shop, but mobile games have been running in-app payment models for years. That head start is paying off.
Gaming IP breaks into mainstream entertainment
The Super Mario Bros Movie crossed $1 billion at the box office, the first game-based film to do it. The Nintendo Switch continues to sell. Xsolla expects the next generation of consoles, including whatever Nintendo releases next, to push the market even further.
Mobile gaming faces privacy challenges, but the report sees it continuing to grow. AI is expected to improve gameplay and drive innovation across the industry.
Xsolla President David Stelzer said: "Together, we're not just part of the gaming industry but actively shaping its future. I'm confident that our best days are still ahead."
Web shops, cloud gaming, and VR on the rise
Chris Hewish, CEO and President of Xsolla, notes that 40 of the top 100 mobile games now run web shops using Xsolla tools. The company has helped 151 games launch web shops total.
The global games market is projected to hit $211.2 billion in revenue by 2025, with mobile games contributing $103.1 billion of that. Cloud gaming is expected to bring in around $8.2 billion, and VR gaming is projected to reach $3.2 billion by 2024.
Real-time payments are changing how people pay for games. Nearly 28% of all electronic payments worldwide will be real-time by 2027, growing at 63% year-on-year. Brazil's PIX system — a digital, low-cost, QR-code-based payment method — is one example of how fast this shift is happening.
The report also covers privacy regulations and the Epic vs. Apple case. Epic didn't win their main demands, but the case has started shifting platform policies. The European Union's Digital Market Act and DSA are expected to open up platforms, giving developers better options for distribution and monetization.
What this means for web3 gaming
The report's findings matter for web3 gaming. Blockchain technology, decentralized platforms, and in-game economies are converging with traditional gaming markets.
Real-time payments, evolving platform policies, and new distribution models create opportunities for web3 games. The data on mobile dominance, revenue growth, and payment innovation provides a baseline for developers building in the web3 space.
As gaming continues to change, Xsolla's report offers a clear picture of where the industry stands and where it's headed. For developers working at the intersection of gaming and web3, that context is useful.
