An Executive Voices Blog by Alex Hiscock, Head of Content Licensing at Euromonitor International

The global videogame industry continues to outperform the wider toys and games market, cementing its position as the primary growth engine of the sector.

Over the past year, that growth has been driven by the rapid expansion of mobile gaming, online subscriptions, and digital distribution models. Videogames hardware grew by 8% in 2025, while online games and subscriptions rose by 5%, underlining the increasing importance of recurring, service-based revenues.

More broadly, videogames are at the heart of a market projected to reach $317 billion by 2029, with overall sales rising 14% between 2024 and 2029 in real terms. This growth follows a stabilisation period in 2024 (and comes after a post-pandemic rebound in 2023), highlighting a shift towards sustainable, structurally driven expansion supported by digital ecosystems and evolving consumer habits.

Who Plays Videogames—and How the Demographic is Evolving

The traditional perception of gamers as young, low-income males is rapidly becoming outdated. Today’s gaming audience is both broader and more affluent. High-income earners are increasingly engaging with videogames on a regular basis, reflecting a shift from niche hobby to mainstream entertainment.

A defining trend is the rise of “kidults”—adult consumers who engage with games and gaming-related experiences for nostalgia, escapism, and social connection.  This segment is reshaping demand, driving interest in more sophisticated, narrative-led experiences and premium content. Declining birth rates and rising numbers of single or childless households are accelerating this trend, positioning adults as a core, high-value audience.

At the same time, accessibility has improved dramatically. Mobile gaming (often free-to-play) has lowered barriers to entry, bringing in casual gamers across all demographics and age groups. This has expanded the gaming audience from a specialist community into a global mass market.

Where Gamers Live and Where Growth is Happening

Geographically, gaming remains strongest in Asia Pacific, North America, and Western Europe, but growth varies by region.

Asia Pacific is the clear global leader, driven by a massive smartphone installed base and advanced digital infrastructure. China dominates the region, supported by local giants such as Tencent and NetEase as well as highly competitive eCommerce ecosystems.

North America and Western Europe, meanwhile, remain mature but highly lucrative markets supported by strong console ecosystems and demand for online gaming services.

Emerging markets—including India, Thailand, and Argentina—are among the fastest-growing globally and benefit from rising middle-class incomes and increasing digital access. While smaller in absolute terms, these regions represent significant future opportunities for expansion.

However, regulatory environments can materially impact growth. For example, Turkey stands out as a rare exception, where government restrictions on digital platforms have constrained videogame expansion.

What Types of Games are Winning

Across platforms, mobile gaming is the dominant growth driver. Its success is underpinned by accessibility, freemium pricing models, and the ubiquity of smartphones, which collectively create a vast base of casual users.

Alongside mobile, online games and subscription services are reshaping the industry. “Play-as-a-service” models—such as Xbox Game Pass—enable continuous engagement, recurring revenue, and lower upfront costs for consumers. These models are increasingly preferred as consumers seek flexibility and value in uncertain economic conditions.

Digital distribution has become the dominant channel for videogame sales, particularly for software. Gamers benefit from instant downloads, cross-platform play, and frequent promotions, while developers gain greater control and higher margins by bypassing traditional retail.

In contrast, console gaming remains important but has seen more cyclical growth tied to hardware release cycles. Demand surged during the pandemic and around major launches but slowed in 2024 due to fewer new releases.

Where the Market is Under Pressure

Despite overall growth, some segments are facing headwinds. Physical videogame sales—particularly boxed software—are in structural decline as digital downloads gain dominance.  While collector editions still perform well, they now represent a niche rather than the mainstream.

Static consoles are also expected to face longer-term pressure as cloud gaming gains traction, potentially reducing the importance of dedicated hardware.

More broadly, consumer spending patterns remain sensitive to economic conditions. The market experienced a sharp decline in 2022 as consumers shifted spending towards travel and experiences and, although it rebounded, growth stabilised in 2024 due to cautious spending and limited innovation.

The Impact of Consolidation and Industry Evolution

The videogame industry is entering a new phase of consolidation and ecosystem-building, driven by digital transformation. Companies are increasingly pursuing platform-based strategies that combine content, distribution, and services into unified ecosystems.

Digital storefronts, subscriptions, and cloud gaming are enabling developers and publishers to control end-to-end user experiences, reduce reliance on intermediaries, and generate recurring revenue streams.

At the same time, cross-industry partnerships and IP licensing are expanding the boundaries of gaming, blending it with fashion, entertainment, and social media.  These collaborations are not only driving engagement but also unlocking new monetisation opportunities and reaching new audiences.

Looking ahead, continued consolidation is likely to strengthen major platforms while raising barriers to entry for smaller players. However, the rise of digital distribution and indie development tools also creates opportunities for niche innovation and global reach.

The Future of Gaming: Digital, Social, and Immersive

Ultimately, the videogame industry is being reshaped by three powerful forces: digitalisation, demographic expansion, and platform convergence.

Mobile-first experiences, social commerce, and immersive technologies are redefining how games are discovered, purchased, and played. As the market evolves, success will depend on the ability to engage a broader, more diverse audience—one that spans generations, geographies, and income levels.

Companies that embrace digital ecosystems, leverage IP across platforms, and deliver personalised, immersive experiences will be best positioned to capture growth in a market increasingly defined by connection, convenience, and continuous engagement.

Euromonitor International helps organizations understand where and how consumers shop through both traditional and emerging retail channels. Comprehensive international coverage and insights as part of syndicated offerings provide retailers, brands, and others in the industry with data and analysis to help guide decisions on investment, expansion and product positioning by category, channel or country. Bridging methodologies based on data science and on-the-ground research, we provide context to strategic and tactical data, helping you answer your biggest challenges and identify opportunities.

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