The Massive Video Game Market in 2022

Video Game Market Analysis

Table of Contents


Video Games have come a long way since their inception in the 1970s. Not only are today’s games more technologically sophisticated, they also reach a much larger audience. The amount of gamers in the world reached a staggering 3.2 billion in 2021, almost half of the world’s population.


With a large number of people playing video games, comes a large amount of money as the video game market is roughly $335 billion in 2021 and is expected to reach over $370 billion in 2023 as reported by Naavik

All of this is to say gaming is a big deal and shouldn’t be ignored in a technology focused investment portfolio. As technology expands in the next decade, Spectacle Investing predicts there will be large changes in the gaming world through blockchain technology, AI in video games and Virtual Reality + Augmented reality. Our analysis of these 3 pillars will follow in the coming weeks, this specific post will detail and outline the current video game market today so that our readers can have a clear picture of the baseline for what’s to come. 


Note: The current video game market will most likely be very different from the video game market of 2030. The most notable companies, monetization strategies, genre of game, geography of players etc. will most likely all be different. Do not base your investment strategy on what is big now, this is a rapidly evolving market.

Market Research Segments

There are 7 main market research segments;

  1. Geography
  2. Revenue Distribution
  3. Size of Companies
  4.  Platforms
  5. Monetization Models
  6. Genre of Games
  7. Type of Player


Gamers are spread out across the globe but there’s definitely a concentration of gamers in specific continents.

Video Games by Geography

Asia in particular has 45% of global gamers housed there(1.48 billion gamers) with Europe coming in second place with about half as many(715 million gamers). As countries in Latin America and Africa become more developed, consumers will have more money to spend and most importantly(for the video game market), more leisure time. With satellite broadband underway, internet access will become more readily available across the globe and online video games will flourish in the next 5 years. 


In terms of Asia, China is an obvious player as they are reported to have 710 million gamers, about equivalent to all of Europe. China has recently escalated their video game crackdown by limiting the amount of time children under 18 can play video games. The new rule set states minors can only play 1 hour between 8pm and 9pm on Fridays, weekends and holidays. Although this will negatively impact China’s gaming market (and positively impact their productivity as less children will become addicted to video games) this shouldn’t damper the video game industry’s growth in the long run as other countries have not displayed interest in implementing a policy of this nature.

Revenue Distribution

Revenue distribution in the gaming market is predominantly split with developers, publishers and 3rd party middlemen who distribute the game. The middlemen consist of large conglomerates like Steam, Google Play, Playstation Store, Epic store etc. who each take a percentage of revenue between 12-30% of game sales and in game purchases. Publishers on the other hand tend to take a much larger cut with a 40-70% cut but they also tend to market and fund the development of the games themselves. The best strategy is that of companies like Activision and CD Projekt who have their own companies that develop the games(Infinity Ward, Treyarch, CD Projekt Red etc.) and they publish the game themselves to retain the profit.

Size of Companies

There’s 3 main categories of companies in the gaming industry. 


AAA – These are large budget game developers with large marketing budgets(typically $100M + for development and $100M + for marketing). Prime examples: Blizzard, Dice, Ubisoft, CDPR etc. 


AA – These are professional, mid sized studios that simply lack the budget of the AAA studios. The AA game studios are less recognizable but some notable games from AA studios are: Fall Guys, Life is Strange, 


Indie Games – Indie developers are individuals or small teams that make games without being owned by another company. Notable Indie studios: Blendo Games, Mobius Digital, Thekla Inc.


The gaming market consists of PC gaming, console gaming( Xbox, Playstation, Nintendo Switch) and mobile gaming. Mobile is rapidly growing as phones become increasingly stronger and more capable of running complex and interactive games. We’ll dive into this segment more in our hardware analysis breakdown.

Monetization Model

There are quite a few methods of monetisation for video games, the staples are quite old but new innovative methods of monetisation have been exploding in popularity in recent times.


Buy to Own – This is the classic monetisation strategy for almost all consumer products where the consumer makes a one time purchase of the game. This strategy has become increasingly less popular across several industries as the digital age has allowed consumers to enjoy products without actually owning them. 


Subscription- Users pay a monthly subscription to play the game, this strategy is most popularized by games like World of Warcraft. 


Free to Play – Free to play is a very unique business model and has taken the video game industry by a storm in recent times. By having no upfront cost to play, the game’s monetization comes from consistent updates to the game with tons of cosmetics and other microtransactions. 


Ads – Advertisers purchase ads which are then displayed to players(typically on mobile gaming) in between gameplay.

Genre of Video Game

Video Games Genre Popularity

Based on the statistics above, it’s evident that Shooters, Action adventure and MOBA(Massive online battle arena) are the most popular video game genres at the moment.  A more significant aspect of game genre is that of multiplayer versus single player titles. In the past decade online multiplayer games have been the dominate force that drives the industry forward with massive titles like Fortnite, Call of Duty, Valorant, Apex Legends etc. Multiplayer games tend to draw more attention as they have a more reinforced network effect and draw in more money due to microtransactions being easier to implement. This isn’t to say single player games are dead, quite the opposite. Technology is enabling video games to become more immersive as well as more random(a key element that single player games lack) which will lead to a resurgence in popularity in the coming years. 

Type of Video Game Player

Video Games Whale Spending
Obtained from DeltaDNA

This chart has a breakdown of whale spenders in video games, “whales” being players that spend large amounts of money on a game. Free to play games and even multiplayer games that have consistent updates, tend to heavily rely on whales to continue generating revenue throughout the games lifespan. Based on these statistics we can see that whales make up about 5% of video game spenders. Important to note, these whales don’t simply spend $100’s to 1000’s per month but have a large amount of medium sized purchases over the span of their time playing the game. For example, the largest whales(those who spend over $1000+) have an average transaction of $39 and their average number of transactions is 55. Knowing this, developers who are able to consciously update their game with fresh, exciting and engaging content are the ones that will be able to capture the whales most effectively. 

Industry Breakdown

With the market segments out of the way, it’s time to look at the breakdown of the video game industry. Spectacle’s research for this section will be obtained from Naavik,  who incorporates an additional layer of analysis when looking at the video game industry. Most analysts simply evaluate the video game industry purely based off of IP, Naavik chooses to include hardware and software sales in their analysis, a strategy that Spectacle agrees with as both the hardware and software of video games are a crucial part of the industry. Because there are two additional layers being added to the total market cap of the industry, Naavik’s numbers are much larger than other analyses out there. Given this information, draw your own conclusions.  

Game Content and IP

This category is typically the standard for which the video game industry is evaluated on. Game content and IP includes; game sales, microtransactions, revenue from esports, arcades and location based gaming.  Additionally, this includes emerging platforms such as AR/VR , web-based games, blockchain gaming and also includes sales in the grey market. VR and AR have a combined total market cap of $3.5B and the Grey market is estimated to be $11B. 

Future Outlook: Blockchain gaming is very much still in its infancy(for more on blockchains and crypto, visit our crypto homepage). The current games being developed on blockchains lack intriguing gameplay and proper communities around them. Over the next 5 years we’ll see massive shifts in this sector, a full and separate post on this will come soon. AR and VR have yet to see the mass adoption the industry was expecting by now. There is the possibility that AR and VR will never achieve that and a new technology will leap frog them and become the new dominate form of gaming. Time will tell but for the present and near future AR and VR are still growling in their own right and as the technology gets better so too will the adoption. Esports is still a very small sector of the entire gaming market but is being flooded every year with investors, organizations and players. Esports will be larger than traditional sports in the future, this is almost certain. 

Gaming Hardware

Gaming hardware constitutes traditional gaming consoles( PlayStation, Xbox, Nintendo Switch) as well as PC hardware(gaming PCs, PC components, streaming peripherals). The market cap of traditional consoles are:

  • Playstation($10.4B)
  • Xbox($6.7B)
  • Nintendo Switch(7.8B)

Future outlook: With 73% of gamers owning a console and 29% owning a VR headset, there’s a ton of room for growth in the VR segment. Better games, cheaper headsets and advances in the hardware themselves can help VR surpass traditional consoles. More importantly, mobile gaming is estimated at $39B and continues to grow year over year. VR integrated with mobile gaming will be interesting but its important to note that smartphones won’t be around forever, there will be technologies that will replace them in the not so distant future. 

Gaming Software

Gaming software looks at the market segment of game related services including B2B, B2Creator and B2C. B2B largely includes revenue from mobile gaming(advertising), game engines and game development tools. B2C predominantly looks at the creators within the gaming community, specifically those on Twitch and Youtube($9.3B).

Future Outlook: Game engine revenue is quite low at the moment sitting at $1.9B which is a small fraction of the gaming market. It’s important to note that engine developers like Unreal and Unity are currently focused on user acquisition and not profit maximization. Video game coaching is also a small segment sitting at $1B but should see exponential growth in the coming years as esports becomes more mainstream


Video games have rapidly advanced in technological sophistication, playability and amount of users reached. They are the biggest form of entertainment across the globe and by a wide margin. This market analysis gave a brief overlook of the common trends that we can see at the moment. Key ones are:

  • Asia is big on gaming, although crackdowns are being implemented
  • VR and mobile gaming are growing quickly
  • Monetization models tend to rely on keeping users engaged over the course of a long period of time
  • None of the current trends will matter in 10 years, this is a rapidly evolving landscape. 

This analysis will have given you  clear outlook on what’s currently big in the gaming world. Make no mistake in investing in what’s currently big. Blockchain gaming, AI and virtual reality will change the scope of gaming far more than we can understand at the moment. Detailed analysis on these topics are coming soon. 

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