Ready, player one? The gaming industry is a hub for expansion and change, rife with economic potential for gaming software companies and service providers. In fact, U.S. consumer spending on gaming software and services (including digital gaming software, in-game purchases, gaming subscriptions, and physical gaming software) totaled $49.9 billion in 2024, with a 2.2% year-over-year (YoY) change.
With no signs of slowing down, gaming companies and related providers can help prepare for the future (and prosperity) by monitoring consumer growth trends and risks within the gaming industry.
Current State of Gaming
The industry boom was undoubtedly shaped by the COVID-19 pandemic. From streaming and live service games to indie games, cloud gaming, cross-platform play, augmented reality (AR), virtual reality (VR), free-to-play, and mobile, people experienced a surplus of time and were able to dedicate attention to all types of games from 2020 on.
During this period, there was an uptick in female gamers which continues to increase despite the industry being a predominantly male consumer space. This set the scene for more game development targeted to women and teenage girls or tailored to both male and female participants.
In a May 2024 Pew Research survey among 1,423 U.S. teens, nearly all boys (97%) said they play video games, compared with about 75% of teen girls. Not only are more girls playing games, but most teens are also playing video games on a gaming console or smartphone. When asked about devices, most teens report playing video games on a gaming console (73%) such as PlayStation, Switch, or Xbox, and 70% do so on a smartphone.
These shifts—toward more female gamers, gaming as whole, and ways to engage with games via console or mobile—represent the impact of this industry and its path forward.
Growth Trends to Watch: Mobile, GenAI, & NFTs
Mobile gaming tracks with this momentum: according to CTA’s Future of Gaming Study, the average time spent playing mobile games is 10 hours a week among gamers, eclipsing consoles’ seven and a half average weekly hours. To that end, 5G and cloud gaming platforms are being created to host these games, coupled with developments in AR and VR technology, to produce even more immersive mobile experiences for players.
As is the case with most industries, artificial intelligence (AI) is also proliferating the status quo. GenAI, a concentration of AI primarily responsible for computing human-like content, is expected to improve the gaming experience and also help developers bring games to market faster. Developers are harnessing GenAI to test new concepts in pre-production and enhance in-game experiences such as environmental assets for players to interact with and non-playable character dialogue.
In addition, AI and GenAI are being utilized more frequently for game development. Developers are experimenting with GenAI during production and using it for various functions within the process, including game testing, terrain generation, automated modeling, voice synthesis, voice modification, sound effects, dialogue generation, dynamic storytelling, and more. It is crucial for developers to consider how this may shape their industry; while GenAI will not replace human creativity that goes into game development, it can speed up creating new games to market. That pace may impact the quality, cost, and other long-term factors in the industry.
Not to be outdone, non-fungible tokens (NFTs) are appearing in gaming spaces as well. One of the most common use cases for NFTs in gaming is for in-game items and asset purchases. Another way NFTs are being used is to provide proof of ownership and authenticity for virtual items. Both of these iterations are meant to enhance gameplay for users. Historically, digital currencies presented only as game-specific. Now, these are beginning to translate to crypto products outside of games. The pull of these products sets the stage for increased digital currency creation that draws on the gamer audience already dialed into a specific program, with the potential to draw gamers onto another platform or product.
Risks Involved
The majority of gaming industry risk stems from regulatory and compliance challenges. Primarily, data privacy and security are critical to safe gaming (not only for the consumer, but also for the companies that manufacture games). Credit card information and personal identification are often used in games or for in-app NFT purchases. More companies are looking to implement a SAFE AI framework to help drive organizational growth and efficiency and combat potential security issues before they arise.
Gaming companies must also comply with age ratings and content restrictions on their products (which can change as presidential administrations take different positions on embracing digital currency and overall regulations).
Lastly, the gaming industry faces several concerns when adopting rapid technological changes and innovation during game development. Companies must make sure that their products meet regulatory requirements through constant updates, while keeping up with demand and marketing cutting-edge games. In addition, the speed of bringing these games to market may make gaming companies more vulnerable to cybersecurity threats.
Key Takeaways From CES 2025
With this in mind, our team gleaned relevant takeaways from the CES 2025 conference in January. The event covered all things consumer technology, and our professionals shared the following insights from several panels in relation to the gaming industry’s growth trends and risks.
- Trends to Watch
- The Consumer Technology Association (CTA) discussed how Gen Z now represents 32% of the purchasing power in consumer technology. In fact, 60% of the Gen Z group are early adopters of technology in the U.S., and their buying habits usually incorporate sustainable products. This points to a shift in focus toward this group and marketing products to a different demographic.
- The future of shopping for products includes AI personalization and virtual “trying on.”
- Other trends include AI integration in products, sustainability, electrified ecosystems, and increased autonomous items.
- Gaming & Franchises: The Future of Gaming
- This presentation was hosted by Monica Austin, chief marketing officer of Blizzard Entertainment, and Oluwafemi Okusanya, head of studio at Fourth Frame Studios.
- The two shared that they are focused on building brands unique to each game and that gaming companies are looking for ways to connect with players on different platforms and bring audiences deeper into stories of the games, e.g., The Last of Us video game and its related HBO television series.
- In addition, they noted the proliferation of mobile as 50% of their players use mobile platforms.
- Gaming companies are also learning the importance of accessibility for players and building stories and games to expand inclusivity and participation.
- They also noted their studio is tracking the success of games through targeted net promoter score (NPS) player surveys.
- Virtual Humans & Conversational AI: Text, Video, & Experiences
- This panel found that companies are prioritizing security and privacy in their operations.
- Using AI to power and generate new business models in the industry is anticipated, as is the focus on the power and technology required to achieve conversational AI for games.
How Forvis Mazars Can Help You Level Up
The gaming industry is a unique sector for innovation and growth, and it can pose significant risks to gaming companies and their partners. Forvis Mazars can assist with these challenges through our data privacy and security offerings, along with our IT Risk & Compliance Services. Our knowledgeable professionals can help protect your cybersecurity protocols, meet the latest regulatory requirements, and keep pace with industry best practices. If you have any questions or need assistance, please contact a professional at Forvis Mazars.
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