In this current date, more than 700 million people play video games with ultimate devotion. As per the market research from Newzoo, this is the number of people who play on a console resulting in the console industry to generate $45 billion annual revenue this year. Also, the money-making pattern has changed rapidly in this industry in the past years.
Looking at the recent dates, both Microsoft and Sony are putting extra effort into software and subscription development. With this, the companies are aiming to emphasize the increasing demand for games. The demand is rising up as per the growth in gaming culture from the coronavirus pandemic lockdown.
However, there are other factors too that have brought about changes in the gaming industry in recent times. Daniel Ahmad, an analyst at Niko Partners, states that consoles business today are making a lot more profit for the Companies like Microsoft, Sony, and Nintendo.
“We’re now moving to a point where hardware is profitable, the software has always been profitable, and network services are playing a much larger role in keeping people within the console gaming ecosystems,” he told CNBC’s “Beyond the Valley” podcast.
Firms in the gaming industry rake higher profit margins while digitally distributing the games compared to selling in the physical stores. Whilst in a game store, publishers would make about $35 on a $60 game, in online downloads, they can make about $45. Woah! This is a whopping increase of 95% for platform holders like Sony selling their first-party games online.
According to the reports, both Sony and Nintendo seem to have much higher downloads of their games online this year. Well, with both Microsoft and Sony selling their digital-only versions of their new consoles at lower prices, it apparently seems like the download pattern will continue to grow.