The global gaming market is one of the world’s fastest-growing business sectors, reaching $202.64 billion in 2021.
Analysts expect the market to continue growing to 2030 at a compound annual growth rate of 10.2%. Various technologies, such as 5G technology and virtual reality, have aided the growth of this market, as well as the popularity of particular gaming segments and market leaders, such as those in the United Kingdom and the United States.
Dominating Countries In The Gaming Industry
In the United Kingdom, gaming segments like iGaming contribute significantly to the European country’s overall gaming industry. For example, roughly 29 million people in Britain alone have participated in iGaming entertainment so far in 2023. A potential reason behind this is the flexibility of iGaming, with many platforms offering desktop and mobile gaming. Many iGaming operators also offer incentivizing bonuses and promotions. For instance, Betfair casino promotions include sign-up offers and free no-deposit bonuses. These bonuses let UK players participate in iGaming games like slots for free.
Oppositely, the gaming segments dominating the United States include multiplayer social games like Fortnite. Between May and June 2023, Fortnite, a multiplayer battle royale game, had over 240 million active players. Social games such as Fortnite are proving to be popular with gamers and US marketers. Since many demographics play social games and these games often feature longer gameplay sessions, the reach and frequency of a company’s promoted content within these games, such as virtual billboards, increases. This phenomenon was demonstrated when over 12 million users tuned into the in-game Travis Scott concert on Fortnite in April 2020.
Interestingly, while the UK and the US are leaders in the global gaming industry, we’re seeing tension rise between the two countries in this market due to Microsoft’s anticipated takeover of Activision Blizzard. In January 2022, US multinational technology company Microsoft disclosed that it would acquire California-based gaming company Activision Blizzard in a cash deal valued at nearly $70 billion. Activision Blizzard is known for publishing the Call of Duty video game franchise, which, as of April 2021, has sold more than 400 million copies worldwide.
Microsoft Tension
Despite the news of the takeover coming out last year, Microsoft has yet to close the deal. That’s because the company is facing restraint from US and UK competition authorities. In April, the UK’s Competition and Markets Authority blocked Microsoft’s purposed takeover, citing concerns that the deal would impact innovation and the dynamic of the gaming industry, particularly cloud gaming, thus impacting UK gamers and developers. The CMA states the impact is due to Microsoft already acting as a leader in cloud gaming, accounting for around 60-70% of the market. By purchasing Activision Blizzard, Microsoft’s position in this industry would be further cemented, limiting development opportunities for other players.
In an attempt to persuade regulators, Microsoft’s president Brad Smith met with Britain’s finance minister in early June. Over the next few months, the public will learn more about the UK’s stance on the future of Microsoft’s proposed takeover of Activision Blizzard. The British appeal hearing is set to take place in July, and a verdict is expected in August or September. US hearings regarding the takeover will also take place over the summer. Regardless of the result, all involved parties will likely be glad the ordeal is over, such as Activision Blizzard, whose share price has fluctuated due to the headwinds. For perspective, Microsoft disclosed that it would buy the company for $95 a share, but the share price has swung and is now sitting at around $80.
The United Kingdom and the United States are two of the most prominent players in the global gaming market, with each country providing unique and distinct added value to gamers, such as through iGaming or social games like Fortnite. However, the two countries face tension as UK regulators remain wary about Microsoft’s takeover of US gaming company Activision Blizzard. Those interested in the case will want to keep an eye on the news cycle over the summer.