Gaming Console Market Trends

Growth Drivers

• Growing popularity of online and multiplayer gaming: The gaming console market is growing substantially on account of the growing demand for social and interactive experiences. With the growth in internet connectivity around the world, more gamers look forward to engaging in competitive or cooperative play and getting steeped into immersive online communities. This move towards social gaming has catalyzed the development of online multiplayer features with games. For instance, in September 2024, BlueStacks unveiled their new feature, Play Together It assists in imagining live streaming the gameplay and playing alongside in real-time. Thus, this feature makes the gameplay even more appealing while driving sustained demand.

• Rise in esports and streaming platforms: The escalation in esports and streaming platforms has heightened commercialization and public popularity for competitive gaming. Esports, has professional tournaments, sponsorships, and media rights that attract tremendous global audiences. This has fueled higher demand for high-performance consoles that support competitive gaming, alongside new avenues of content creation and game exhibition has aided in brand visibility. For instance, in June 2022, Microsoft's Xbox entered Samsung Gaming Hub, to include the Xbox App on Smart TVs. With this association, users will now be able to stream over 100 games of top-notch quality through subscribing to Xbox Game Pass Ultimate. As esports grows, the consoles are becoming increasingly important, thus also triggering market growth.

Challenges

• Digital ownership and monetization issues: The critical issue regarding the gaming console market is primarily an increase in concern over the low resale value of digital content. In addition, a myth that states physical games could be resold or traded, further reduces consumer flexibility and perceived ownership. This has resulted in quiescent growth among gamers, particularly as the industry increasingly shifts towards subscription models and microtransactions. As consumer demands for greater transparency and fairness in digital transactions continue to grow, pressure mounts upon console manufacturers and game publishers to resolve these issues while keeping monetization profitable.

• High production cost and component shortage: The advanced consoles which are integrated with high-performance processors, graphics cards, and storage solutions result in a higher manufacturing process. In addition, major supply chain disruptions across the world, especially due to the COVID-19 outbreak, have caused significant shortages of key components, which delay production and therefore limit the number of consoles available for the consumer. This would not only negatively impact the pricing strategy of console makers but also impact consumer access and contribute to inflationary pressures and slow growth in the gaming console market as a whole.