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Move Over Hollywood: Why Gaming Is the New King of Entertainment

source-logo  coindesk.com 09 July 2024 16:05, UTC

The global entertainment and media industry is expected to hit a market size of approximately $2.9 trillion by 2027, and it’s gaming, not Hollywood, that’s driving this surge. With an expected revenue of $312 billion, gaming is eclipsing the combined might of the music and film sectors. This isn’t just a trend; it’s a seismic shift in how we consume entertainment.

Gaming habits in the U.S. demonstrate substantial engagement across various age groups. A significant portion of Americans regularly play mobile or console games, with many dedicating considerable time to gaming each week. Millennials are particularly active, with some gaming for over 13 hours weekly.

This op-ed is part of CoinDesk's GameFi Theme Week. Yemel Jardi is a co-founder of Decentraland, and the Executive Director of the Decentraland Foundation. Launched in 2020, Decentraland is a virtual social world powered by the Ethereum blockchain and the first decentralized metaverse.

This phenomenon isn't confined to American shores. Gaming is booming in markets like China, Japan, and South Korea, showing that its appeal is both universal and unstoppable.

Read more: What Hamster Kombat Did: How Telegram Built a Web3 Gaming Juggernaut

But the story doesn’t end there. The gaming industry's influence extends beyond traditional boundaries, creating interdependencies with other forms of media. Younger generations are increasingly inspired to play video games based on TV shows or movies, and many express a desire for video game adaptations of their favorite media properties. This interconnectedness between gaming, traditional media, and social media is opening up new opportunities for audience engagement and monetization, signaling that the future of entertainment is not just watching or listening, but also about interactive, immersive, and social experiences that gaming uniquely provides. Traditional media needs to catch up, or risk being left behind.

Evolution of different segments

Mobile gaming as the dominant industry sector accounts for about half of the total revenue within gaming. The accessibility of smartphones and the success of free-to-play models with in-app purchases have made mobile gaming immensely popular. Mobile games like Roblox target younger audiences, with 86% of Gen Z globally engaging in mobile gaming, shaping the future generations of consumers.

PC and console gaming continues to be the platforms of choice for high-performance and exclusive titles, together accounting for the other 50% of the industry. These segments thrive on their ability to deliver immersive, graphically rich experiences. Advances in AI are enhancing GPU capabilities, resulting in better graphics and more engaging gameplay. This is the preferred platform for AAA games and onboarding new intellectual properties, ensuring sustained growth in these areas.

VR and AR gaming, though still in their early stages, show immense promise. These platforms are leading the next computing revolution, with major companies competing for dominance. Social VR experiences, such as VRChat with its 20,000 daily active users, highlight the potential of these technologies. XR is seen as the next generation of personal computers, with Meta and Apple vying for dominance in a battle resembling the Windows vs. Mac and Android vs. iOS wars.

Distribution fragmentation and blockchain revival

Control of game distribution is crucial, with major brands establishing their own stores to manage game releases. The game store market is becoming more fragmented, with Steam, Google Play, and the App Store holding significant shares, while other big publishers like Xbox, Nintendo, Epic, and EA also have their own stores. Publishers play a vital role in financing and supporting game development. The blockchain industry is making significant inroads into gaming, acquiring titles and studios to integrate the technology. This promises a new wave of high-quality games using true ownership of in-game assets and greater interoperability between games.

Role of AI in the gaming

AI is set to transform the gaming industry by reducing costs and enhancing creativity. Creating a game requires a wide range of skills, including art, writing, animation, and programming. AI can automate many aspects of this process, making development more efficient and cost-effective. The technology powering AI, primarily GPUs, is the same used for rendering games. This alignment has been reflected in NVIDIA's stock price, making it one of the most valuable companies in the world. Moreover, as AI takes on more tasks, people will have more free time to engage in gaming, a trend that became evident during the COVID-19 pandemic.

Gaming has emerged as a transformative force in the entertainment industry, redefining how we consume media and interact with digital content. Its influence extends far beyond traditional gameplay, shaping storytelling, community building, and technological innovation. As gaming converges with other forms of media and embraces cutting-edge technologies like AI, VR, and blockchain, it's paving the way for more immersive, interactive, and personalized experiences.

The future of entertainment is intertwined with the advancements and growth within the gaming sector, opening up a future where interactive digital experiences take center stage. To stay relevant in this dynamic environment, the entertainment industry must innovate and integrate with these emerging technologies or be satisfied with increasingly reduced engagement from the generations to come.

Note: The views expressed in this column are those of the author and do not necessarily reflect those of CoinDesk, Inc. or its owners and affiliates.