The games market in 2020: growth across all market segments

Sales of computer and video games and game hardware have already increased significantly in previous years. With this high dynamic, the video games market once again underlines its unique position among the cultural and media markets. Germany generates the highest turnover from computer and video games in a European comparison, while the German market continues to rank fifth worldwide.

Subscription revenues for individual games, such as Final Fantasy XIV (Square Enix) or World of Warcraft (Activision Blizzard), are on the rise again. After a loss in 2019, this submarket grew significantly by 44 per cent to 163 million euros in 2020. The submarket for computer and video games saw even stronger growth, with revenues of 5.2 billion euros achieved through game purchases, in-game and in-app purchases, subscriptions and charges for online services. As a result, this part of the market grew by 36 per cent compared to the previous year. The sale of computer and video games generated more than 1.1 billion euros in revenue, an 11 per cent increase over 2019. The strongest increase was posted in sales revenue for in-game and in-app purchases, which grew by 44 per cent within a single year, achieving total sales revenue of over 3.2 billion euros. Within just a few years, in-game purchases have developed from an additional business model to the largest market segment.

German market for mobile games grows by 23 per cent

The submarket for game apps posted strong growth again in 2020. In Germany, within a single year, the sales revenue for games designed for smartphones and tablets increased by 23 per cent to roughly 2.3 billion euros. This represented a continuation of the impressive growth exhibited in the market for game apps in the previous years: sales revenue grew by 22 per cent in 2019 and by a remarkable 31 per cent the year before. The year 2020 saw the continuation of another positive trend from the previous years: the market growth is directly attributable to in-app purchases. Sales revenue from these kinds of purchases grew by 24 per cent to about 2.3 billion euros. Free-to-play games, especially, relied on in-game purchases. These are titles that can be downloaded and played free of charge. Players can opt to spend money for additional content, such as personalising their own avatar in a game. Free-to-play games are particularly successful on smartphones and tablets. The market segment for game apps available for purchase, in contrast, declined again. In 2020, sales revenue for these titles dropped by 15 per cent, down to roughly 11 million euros.

Strong interest in cloud gaming and subscription services

Only one market segment has grown even faster than in-game and in-app purchases: fee-based online services. They allow video game players worldwide to compete online against one another, access cloud gaming offerings or use a large catalogue of games for a fixed monthly price. The last several years have seen significant growth not only in the variety of online gaming services but also in players’ interest in them. In Germany, sales revenue from these services increased by 50 per cent in a single year, to 692 million euros. This value is nearly double that of 2018 when 353 million euros in sales were achieved with online gaming services. Cloud gaming services showed the strongest rise in sales revenue: within just one year, this segment grew by 67 per cent to 72 million euros. With cloud gaming services, players no longer need high-performance hardware to play titles with their full range of graphics. Among the services in this category are GeForce Now from Nvidia, MagentaGaming from Telekom, PlayStation Now from Sony and Stadia Pro from Google. While sales revenue with online gaming services like Nintendo Switch Online, PlayStation Plus and Xbox Live Gold grew somewhat more slowly, at 50 per cent, this submarket is already considerably larger: 439 million euros in sales revenue were achieved in 2020 through services of this kind. In addition to game rebates and the saving of scores on the internet, these services also allow customers to play online via games consoles. Significantly more was also spent on subscription gaming services in 2020: this submarket grew by 44 per cent to a total value of 181 million euros. For a fixed monthly price, services like EA Play, the Xbox Game Pass from Microsoft, Ubisoft+, Apple Arcade and the Google Play Pass offer access to an extensive games library. Around one in five video game players in Germany uses subscription gaming services – equivalent to around 8 million people. These services are well-received: around three quarters of users of gaming subscription services (73 per cent) rate the services as good to very good. And around 6 out of 10 users of gaming subscription services are trying out more games since these services became available.

Demand for games hardware increased significantly in previous years

Whereas in 2019, sales of gaming PCs, games consoles and accessories generated around 2.5 billion euros, this figure rose to over 3.2 billion euros in 2020. This equates to an increase of 26 per cent. There was a particularly high demand for peripherals for gaming PCs, with sales of special gaming mice, keyboards, monitors, graphics cards and virtual reality headsets generating around 1.2 billion euros – approximately 46 per cent more than in 2019. Sales of consoles and console accessories also grew considerably last year. Stationary and handheld consoles generated around 650 million euros, which was 25 per cent more than in 2019; console accessories such as gamepads and steering wheels generated 275 million euros – an increase of 24 per cent. Sales of gaming PCs also increased to around 1.1 billion euros, about 10 per cent higher than in 2019.

Game downloads surge during the first year of the pandemic (2020)

The trend of purchasing computer and video games by download accelerated significantly in 2020, a year marked by the Covid-19 pandemic. Alongside the mail-order trade, the only option open to many games fans during periods of closed retail businesses was purchase via download to PCs and games consoles. This spurred a jump in the download share of sales in PC and console games from 45 to 58 per cent within 12 months – meaning that 6 in 10 games purchases in 2020 were made via download. The download share of sales revenue is somewhat lower: downloads account for about 4 in 10 euros in sales made in Germany in 2020 with PC and console games, up from 33 per cent in 2019. As a general rule, the cheaper the game is, the greater the share of download purchases. 8 in 10 computer and video games costing up to 30 euros are purchased as downloads. There are big differences between PC and games consoles. For PC games, the download share of sales is 94 per cent. For games consoles like PlayStation, Switch and Xbox, on the other hand, only about 1 in 3 games (35 per cent) is purchased via download. However, this represents a considerable increase in comparison to 2019, when the share was 24 per cent.

Gaming platform prospects: sharp rise in number of players during the first year of the pandemic (2020)

More than half of Germans play computer and video games. Overall, 58 per cent of the population between the ages of 6 and 69 reach for their consoles, PCs or smartphones in order to immerse themselves in a digital world. In the first year of the pandemic (2020) alone, around 5 per cent more people in Germany took up playing computer and video games. 48 per cent were women, and 52 per cent men. The average age of video game players in Germany increased to over 37 in 2021.