According to a new report published by Research and Markets, the Gaming Console market is expected to grow steadily over the next 5 years by a staggering $14 Billion. This comes as a result of a 14.9% compounded growth that is being projected by the analysts.
However, this expected growth does not exactly match up with the mainstream rhetoric according to which the console sales will eventually slow down as they are gradually drifting towards traditional PC hardware. Let’s take a deeper look to understand what is going on here.
Steady growth for the gaming console market over the next 5 years
According to the report, consoles will maintain a steady growth at least until the year 2025 and “will bring in healthy gains adding significant momentum to global growth”. This is not only true for the US but also applies to other markets as well. In Europe, Germany alone will see an impressive growth of over $547.5 Million in the next five years.
The Eastern European market will also continue to grow for gaming consoles with over $447.7 Million worth of projected demand to be added to the region in the coming years. Additionally, the Japanese market is also expected to reach a very respectable market size of $795.5 Million by the end of 2025.
The biggest regional growth around the globe, however, is seen in the Chinese market with a potential to grow at an astonishingly high 19.3% over the next couple of years. This will add another $3.5 Billion to the market and will only continue to grow over the years. Businesses have already been looking for opportunities to invest in the 3D gaming console market in other regions, apart from the big players like Sony, Microsoft and Nintendo.
We should, however, not forget that there are always going to be other factors that will continue to shape these numbers over the coming years. In addition to that, we’re also seeing changes in demand patterns in emerging console markets like the Middle East, Asia-Pacific, India and Latin America. The growth over the next 5 years is also especially promising because of new next-gen hardware coming out in 2020.
How are gaming consoles still growing despite the increasing costs?
Gaming consoles have always been at the forefront of leading mainstream video game consumption. While there are obvious advantages that a PC possesses over a traditional gaming console, the convenience and cost-saving that the consumers get with a gaming console cannot be undermined.
However, as we move through the generations, we’re starting to see a shift in the release cycles and costs of these consoles. Most modern day consoles are much more similar to a normal PC. While this change allows better production capacity thanks to a more standard hardware, it does strip the consoles of their ‘special’ status. As PC hardware progression continues to accelerate, consoles are getting obsolete at a much faster pace. This is why we got a mid-generation update this time around with the PS4 Pro and Xbox One X.
In addition to that, hardware is also getting more expensive as it improves. The next generation of consoles, launching next year, is expected to carry much higher costs because of better hardware. This will elevate these consoles to an estimated launch price of around $500. Now, if older consoles launched at $500, people really wouldn’t buy them since you could have had a similarly good PC for the same price range back then.
However, PC parts have become equally more expensive as well so to get the graphical fidelity that these consoles promise right now, you’d have to spend a lot more than $500. Thanks to subsidized supplier costs and basically no profit margins at launch, this cost gap between a gaming console and PC will always be present at launch. Henceforth, gaming consoles can retain their spots and continue to grow within the industry despite being much more expensive as compared to their previous versions.
For more information about this report, click here.