80% of all digital games revenue now from F2P, digital PC market now almost double consoles

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The latest annual report on the games industry has arrived from SuperData, painting an interesting picture of where the games industry was at in 2019.

As always, digital game sales were on the rise yet again, gaining 3% year on year as we increasingly leave the shackles of physical products behind. But it’s which games we’re spending our money on that’s the highlight. 80% of the $120.1 billion spent on digital games went on free-to-play titles. That’s four out of every five dollars spent on digital games going toward F2P titles. Now there’s a confusing misnomer if ever we’d heard one.

Mobile games continue to be the silent killer in this sector. $64.4 billion was spent on mobile games in 2019, accounting for more than half of the total spend on games. Six of the top 10 F2P titles were mobile games, although all of them were pipped to the number one spot by Fortnite, the most successful F2P game for a second year running with revenue of $1.8 billion. That’s always 10% of the entire AAA games revenue account for by a single game.

Apex Legends didn’t manage to squeeze into the top 10 F2P games by revenue but its launch was, by and large, a big success for Respawn and EA.

As for the result of the industry, PC gaming now accounts for $29.6 billion annually (~25% of the total market) while consoles languish in third place with $15.4 billion.

What’s really surprising is the premium games market, by which the data is referring to AAA titles which represent just 15.7% of the global digital market in terms of revenue. Sales of premium games dipped 5% year on year down to $18.9 billion, a drop attributed to the lack of major AAA releases. In 2018 we had Red Dead Redemption 2, Spider-Man and Monster Hunter World; in 2019 we had the usual annual releases and not a whole let else which really moved the needle.

AAA gaming is but a small fraction of the overall video games industry but this data does provide an indicator of just how far gaming has spread and just what direction it will take in the years ahead. However, these figures do not take into account physical game sales, which still account for a fairly sizeable chunk of the AAA market.

One final element to highlight is that sales of VR hardware remained firm. Overall shipments were up marginally, spurred on by the huge increase in standalone VR headset sales courtesy of the Oculus Quest. Sales of PlayStation VR dipped from 1.6m to 1.2m for the year. Standalone VR headsets now account for half of all VR headset sales and it’s easy to see this is where the growth of the technology will lie. No one wants to be tethered to a device while in VR and these standalone standalone headsets are the ideal solution provided the performance is there.

Looking forward, Superdata expects the digital games market to grow a further 4% in 2020, rising up to $124.8 billion. The PlayStation 5 and Xbox Series X will be a big driver for this but there are also some huge games to account for, including Cyberpunk 2077, The Last Of Us: Part II, Animal Crossing and Halo Infinite.