US Video Game Industry Revenues Grew by 18% in 2017

January 29, 2018

Total consumer spending in the video game industry reached $36 billion last year, representing an 18% rise over 2016’s $30.4 billion, per recent data released by the Entertainment Software Association (ESA) and The NPD Group.

The report shows that growth was consistent across both hardware and software, though the latter is the far larger market.

Overall, video game software revenues – which include physical and digital sales as well as in-game purchases and subscriptions – grew by 18% year-over-year to $29.1 billion.

Video game hardware sales, meanwhile, increased by 19% to reach $6.9 billion.

These figures include mobile spending data, provided by App Annie, which include paid downloads and in-game purchases for mobile and tablet devices through Apple’s App Store and Google Play.

Data released monthly by The NPD Group shows that 2017 was a turnaround year for the video game industry. Total video game spending (including hardware and software but excluding mobile games) first increased on a year-over-year basis in March, reversing 9 consecutive months of declines. From them on, 6 of the remaining 9 months beginning in Q2 2017 registered a year-over-year increase, including September’s substantial 39% jump.

The NPD Group also recently reported that “on a time-aligned basis through the first ten months on the market, Nintendo Switch has sold more consoles than any other platform in history.”

In its Games 360 U.S. Report [download page] released last year, Nielsen revealed that 64% of Americans ages 13 and older identified as gamers in 2016, up from 58% in 2012. Most gamers (54%) play on more than one device type, as 38% of console players also play games on mobiles or tablets.

The study also revealed that gamers estimated spending about 12% of their leisure time playing video games or engaging in eSports activities.

Separate research from Nielsen indicates that 1 in 3 US households owns a Game Console, with these devices particularly prevalent among Hispanic households (40% owning one).

The popularity of video games also presents an opportunity for advertisers. While advertising in video games is just a small slice of the overall market, PwC forecast that about $1.4 billion would be spent advertising in video games in 2017, with that growing to $1.9 billion in 2021. For context, that would make the video game advertising market about twice as large as the cinema advertising market.

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