Videogame Industry Worth Over $100 Billion Worldwide

Videogame Industry Worth Over $100 Billion Worldwide

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A financial expert has tallied up the total value of the videogame industry's companies, and it's a whole lot of money.

Paul Heydon of independent banking firm Avista Partners, an investment banker working in the game sector since 1999, has come up with his best guess for the approximate value of the videogame business across the entire world. Speaking at the UK's Edinburgh Interactive Festival 2010 this week, Heydon puts videogaming at about $105 billion worldwide.

His numbers include the combination of the share values of Nintendo, Sony, Microsoft, Mobile gaming, retail sales, online gaming, and various other videogame industry sectors. He puts Nintendo at roughly 1/3 of the current industry's total with around $35 billion. As a comparison, other PC and console companies combined make up a total of $33 billion.

Online game companies have a value of $23 billion worldwide, which isn't surprising, but something notable is the amount of public online companies in the West versus the East. Of 44 total public online game companies, only 4 are in the West. I'm assuming he's referring to online-only companies, but financial results analysis is not necessarily my forte.

The rest of the $105 billion is made of up of mobile companies at $8 billion, retail at $3 billion, payment services at $1.3 billion, distribution/accessories with $311 million, and outsourcing at $255 million. These results are far from 100% accurate, but they do give a general idea of the videogame market's current status, and what's bringing in money and what's not.

Heydon says that these numbers show how the videogame industry has changed over the years. Where there was once a direct path from developer to publisher to distributor to retailer to consumer, now are multitudes of other avenues that allow new types of games to exist such as free-to-play MMORPGs and games sold solely through the internet from developer to consumer. Heydon predicts that the value of Mobile gaming will continue to rise, but said that retail and distribution were stagnating. Now that we have a general gauge for this stuff, I'd be interested to see a comparison in 3-5 years.

Source: Avista Partners, via MCV

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Great news

Now I want a piece of that money pie.

that is a lot! :) probably will begin to get even higher in the next couple years or so like you said.

i would have thought that wow subscriptions alone would be worth that :P

....That doesn't actually sound that much?

I'm gonna go out on a whim here, but i'm guessing i'm the only one who thought that when i saw the number.

I do hope he did not include the total value of sony and Microsoft since only a small fraction of there companies are tied into gaming.

vrbtny:
....That doesn't actually sound that much?

I'm gonna go out on a whim here, but i'm guessing i'm the only one who thought that when i saw the number.

No, you aren't the only one who thought that. All I can think of is that the USA alone spends about six times that on it's military. For a global entertainment industry that, at least now, is fairly mainstream and popular, one hundred billion is nothing.

Wow thats a lot of bananas
and cheddar
the green stuff
Hard cash
greenbacks
assets
in other word thats alot of F*#@ing money god dammit

And that is why the Video Game Industry shouldn't be flamed upon.

Do note that this is an estimate of the total worth. If you actually happen to try having a slice of the pie it'll be very tiny. A crumb.

God, only 100 billion dollars! How dare we let those used game sales continue! Why, Bobby Kotick may need to sell one of his dozen Ferrari's to fill his caviar swimming poll next year!

That, is awesome. Who says that gamers dont put something back into the world lol

the problem with this kind of news, is that more economists and people who's racionality differs from a gaming perspective, will take over the businesses and just think of profit...

Am i the only one to see that this will fuck up even more the videogame devs with Economists as CEO's who think only of maximizing profit and squezzing the best our pockets ?

That's it? I didn't think that video games where like movie industry big but I it was bigger then that.

Uh, Guys?

100 Billion is not a lot of money...

Extraintrovert:

vrbtny:
....That doesn't actually sound that much?

I'm gonna go out on a whim here, but i'm guessing i'm the only one who thought that when i saw the number.

No, you aren't the only one who thought that. All I can think of is that the USA alone spends about six times that on it's military. For a global entertainment industry that, at least now, is fairly mainstream and popular, one hundred billion is nothing.

What you talking 'bout willis?

The cinema industry of the ENTIRE United States is worth only $10 billion:

http://en.wikipedia.org/wiki/Cinema_of_the_United_States#Modern_cinema

And this industry tends to dominate a LOT.

Also the US Music Industry is worth only $27.5 Billion:

http://en.wikipedia.org/wiki/Music_industry#21st_Century

$100 billion IS A LOT! Comparing a singular industry to the military spending of a superpower like the USA is ridiculous as this is the an "investment" to protect everything else that they hold valuable.

Remember... video games are supposed to be a "niche" entertainment industry. Certainly $100 billion is a LOT for that, eh? Most of all this report indicates a lack of capitalisation with only 4 online-only companies in the West.

Darth_Dude:
Uh, Guys?

100 Billion is not a lot of money...

How is it not a lot?

Sheesh, I know we have all gotten a bit jaded to money now we are living in with "Trillionaire" economics of Trillions of dollars in expenditure, Trillions of dollars in debt, Trillion dollar loans and Trillion everything; Trillion bytes of data in a typical hard drive.

But 100 billion is one tenth of a trillion... how many industries come close to even a small fraction of a Trillion? Gaming industry to spite being considered a very niche-entertainment is earning WAY more than other entertainment industries.

Now that we have a general gauge for this stuff, I'd be interested to see a comparison in 3-5 years.

Console gaming is going to be dead by then so the figure might be a little smaller.

Treblaine:

What you talking 'bout willis?

The cinema industry of the ENTIRE United States is worth only $10 billion:

http://en.wikipedia.org/wiki/Cinema_of_the_United_States#Modern_cinema

And this industry tends to dominate a LOT.

Also the US Music Industry is worth only $27.5 Billion:

http://en.wikipedia.org/wiki/Music_industry#21st_Century

What you are quoting is not how much those respective companies are worth, but rather their annual revenues. The $100 billion is the combined shareholder value of all video gaming companies, not the annual revenue.

http://gamer.blorge.com/2010/01/16/2009-video-game-industry-revenue-breakdown/
2009 revenue was only $19 billion for US gaming industry. Still more than cinema, but less than music. And remember, these are just revenues, not profits.

Treblaine:

Extraintrovert:

vrbtny:
....That doesn't actually sound that much?

I'm gonna go out on a whim here, but i'm guessing i'm the only one who thought that when i saw the number.

No, you aren't the only one who thought that. All I can think of is that the USA alone spends about six times that on it's military. For a global entertainment industry that, at least now, is fairly mainstream and popular, one hundred billion is nothing.

What you talking 'bout willis?

The cinema industry of the ENTIRE United States is worth only $10 billion:

http://en.wikipedia.org/wiki/Cinema_of_the_United_States#Modern_cinema

And this industry tends to dominate a LOT.

Also the US Music Industry is worth only $27.5 Billion:

http://en.wikipedia.org/wiki/Music_industry#21st_Century

$100 billion IS A LOT! Comparing a singular industry to the military spending of a superpower like the USA is ridiculous as this is the an "investment" to protect everything else that they hold valuable.

Remember... video games are supposed to be a "niche" entertainment industry. Certainly $100 billion is a LOT for that, eh? Most of all this report indicates a lack of capitalisation with only 4 online-only companies in the West.

You really swing in and obliterate any misconceptions others might have, don't ya? ;-)

OT:I had read a Newsweek article long ago that claimed video games were becoming a far more profitable industry than cinema. I'm glad to see that at least in economic terms, the games industry is getting the credit it deserves.

They needed an expert to estimate and calculate that number? Seemed like a rather easy thing to estimate in such rough terms; they could have asked a 12 year old who's response would have been something like:

"Over 100 billion!!!"

or more like:

"OVER 9 BILLLLLIIIOOOOOOOOOON!!!11!!!"

Okay, it's a lot of money.

If they so rich how come more and more people are loosing jobs, i wonder how this is compaired to other industrys

Treblaine:

Extraintrovert:

vrbtny:
....That doesn't actually sound that much?

I'm gonna go out on a whim here, but i'm guessing i'm the only one who thought that when i saw the number.

No, you aren't the only one who thought that. All I can think of is that the USA alone spends about six times that on it's military. For a global entertainment industry that, at least now, is fairly mainstream and popular, one hundred billion is nothing.

What you talking 'bout willis?

The cinema industry of the ENTIRE United States is worth only $10 billion:

http://en.wikipedia.org/wiki/Cinema_of_the_United_States#Modern_cinema

And this industry tends to dominate a LOT.

Also the US Music Industry is worth only $27.5 Billion:

http://en.wikipedia.org/wiki/Music_industry#21st_Century

$100 billion IS A LOT! Comparing a singular industry to the military spending of a superpower like the USA is ridiculous as this is the an "investment" to protect everything else that they hold valuable.

Remember... video games are supposed to be a "niche" entertainment industry. Certainly $100 billion is a LOT for that, eh? Most of all this report indicates a lack of capitalisation with only 4 online-only companies in the West.

Small but rather important point your figures are for the US only and not worldwide the 108 billion is world wide. Hollywood alone made $51 billion worldwide in 2002 and by the time you add in Bollywood, Nollywood and Hong Kong you ease past $108 billion without much trouble.

If you look at breakdown by division of Microsoft profits you can see that gaming is only a minor player in its revenues. http://www.businessinsider.com/chart-of-the-day-microsoft-operating-income-by-division-2010-2

Hooray for succesful Corporations!

Now get using that money to innovate and create Dammit!

Bullshit. The "value" (if we can even guess that) must be waaaaay more. 100 billion, that's around a value of Microsoft of Apple.

A whole worldwide industry with the likes of EA, Activision, Ubisoft and Nintendo (companies that do nothing else but gaming) must be way more than that. Wasn't just Ubisoft said to be worth like $30 billion or something recently?

And how much did GTA IV cost again? $100 mil? What kind of a company can spend that much on one product? A multi-billion one of course.

Looks like piracy and used game sales are really crippling the gaming industry, eh? /sarcasm

Treblaine:

Darth_Dude:
Uh, Guys?

100 Billion is not a lot of money...

Gaming industry to spite being considered a very niche-entertainment is earning WAY more than other entertainment industries.

Ok, 100 Billion is alot. But it's not alot. Get what I mean?

Worth 100 billion eh?

I wonder how much of that is eaten by Activision Blizzard alone...

 

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