The Gaming Industry – unlocking the next level

The gaming market boasts a player base of over one-third of the global population and is a fast-growing segment of the entertainment industry expected to generate ~$190bn in 2024 according to Newzoo. Mobile gaming remains the fastest-growing segment, with a remarkable CAGR of around 18%, driven by the ubiquity of smartphones and the accessibility of gaming apps. Console gaming also continues to see robust growth, with a CAGR of approximately 13%, buoyed by the release of next-generation consoles and blockbuster titles. Meanwhile, PC gaming maintains a steady pace, with a CAGR of around 4%, driven by innovations in hardware and software.

The proliferation of gaming platforms has led to an explosion in the number of games released annually. For instance, on Steam alone, the number of games released per year has surged by over 5,000% since 2008, reaching more than 14,000 titles released in 2023. This surge is predominantly fuelled by independent developers who have embraced digital distribution channels to reach global audiences.

In terms of player engagement, the average number of hours played per week continues to rise. In the UK, for example, gamers now spend over 12 hours per week on average playing games, reflecting a 30% increase since 2011. The gaming demographics are also evolving with the audience broadening touching all age ranges. The average age of a gamer in the UK is 28 and it is estimated that 51% of 36- to 50-year-olds play games.

Digital transformation affects all aspects of our lives and has contributed to the surge of gaming, notably through the shift from physical to digital game distribution. A consequence of this shift in business model is that even smaller but very talented independent studios can now compete with the largest publishing brands in the world, provided they have the right financial partner on board, a partner like QPE.

To reach the next level, small studios typically have two main options. They can receive development funding from a publisher for a specific project (generally giving up an element or complete publishing rights) or find funding that will enable them to keep their autonomy and develop wholly IP owned independent games.

At QPE, we understand that innovation and the quality of the games developed are more important than the pace of games development, and reputation and highest standard of game production are key to attract the best publishers and secure the best development contracts. QPE can help game developers mix their own intellectual property with publisher-funded development to ensure stable income and a favourable working capital cycle, and ultimately boost scalability whilst keeping highest quality standards of game development. We can also help tackle key growth challenges, supporting to secure talent globally and by working with industry leaders to open opportunities and share best practices.

A strong pipeline of development projects is also paramount for the continuity and growth of any game developer, and through our network QPE is well positioned to help build strong relationships with key stakeholders in the gaming sector.

Further, AI and data analytics have emerged as a game-changer (excuse the pun!), with "never-ending" games constantly evolving through data collection, particularly on mobile devices, giving rise to continuous monetisation opportunities to keep funding the next game development. QPE can provide the right level of support to implement the right initiatives to make the most of this data rich environment.

QPE sees gaming as an essential thread in its exposure to digital transformation, a theme accelerated by the CV-19 pandemic and its impact on how we work, communicate, socialise, and consume. We always aim to support the right leadership team structure, hire and retain the best talent, and provide strong strategic and business development functions to help companies build on their existing successes. The growth of the gaming sector has made it an attractive investment opportunity and at QPE, we are ready to provide capital and strategic support to UK and European businesses to develop games, build on the game developer’s vision to grow and professionalise teams to achieve international scale.