i3 | January 27, 2023

Gaming Levels Up and Into the Metaverse

Brian Comiskey
CES 2023

Deeply immersive, highly accessible and customizable experiences join the latest innovations driving the gaming industry.

The U.S. gaming industry engages 164 million users across virtually every social demographic and saw an increase of 9 million new users since 2019, according to Consumer Technology Association’s (CTA)® most recent “The Future of Gaming 2022” study.

Ingenious tech innovation drives the industry, making experiences deeply immersive, highly accessible and customizable. Gamers of all ages have flocked to consoles and cloud streaming services, spurring the industry to continuously level up technologies to sate consumer appetite for new virtual worlds and challenges.

Beyond entertainment, gaming now shapes how we teach, test, collaborate and motivate across a variety of industries. Gaming software, platforms and technologies enable rich experiences that have pushed significant growth in terms of revenue and user populations. Gaming revenue could increase to $54.4 billion in 2023, according to the latest forecast from CTA. “The Future of Gaming 2022” study also found that 73% of 224 million U.S. adults and adolescents now make up the active gaming population. Those findings illuminate an industry buoyed by diverse and cutting-edge gaming options.

Game publishers, hardware manufacturers and retailers will enjoy a wide array of creative and technical opportunities to explore this growing market throughout CES® 2023. Further, CTA actively monitors trends in the gaming industry as part of its robust work on the Nasdaq CTA Global Video Games and Esports Index™ (PLAYER™) and the Nasdaq CTA Global Video Games Software Index™ (PLAYR2™). Watch this pair of key trends closely as the gaming sector expands.

Gaming Meets the Cloud

New streaming services and cloud computing advances have whetted gamers’ appetites for new ways to access and interact with gaming experiences.

With similar potential for expansive libraries like audio and video streaming services, cloud-based gaming offers the promise of easier access to a wider range of titles on a singular platform. Improvements to latency and performance in cloud gaming software provide gamers with the flexibility to stream and play games from a variety of compatible devices, including laptops, smart TVs, tablets and phones. The mobile gaming market is critical to cloud gaming providers’ ability to successfully tap into the double-digit growth in mobile gaming adoption through more recent years.

Despite Google Stadia’s recent shutdown, cloud gaming services are charting growth with Microsoft’s Xbox Game Pass, Amazon’s Luna and Nvidia’s GeForce, now emerging as leading platforms bolstered by their more expansive catalogs of gaming titles. Consequently, nearly half of U.S. gamers now pay for gaming subscription services, in part the result of heightened awareness of, and access to, new cloud options, according to CTA research.

While Google Stadia may not continue to operate in its current form, the software behind the platform has already demonstrated success as a white-label product for clients like AT&T. Given Google’s position as a leader in cloud infrastructure, it is very likely the company’s expertise can be leveraged as part of another cloud gaming venture or to push advancements of this innovative technology into new consumer and enterprise applications.

65% of gamers expect gaming to become more social in the next five years as gaming becomes more virtual, driven by metaverse innovation.

Make Way for the Metaverse

Hardcore gamers and young people are also entering new digital realms as the early stage metaverse continues to evolve. An expected 62 million (or 37% of gamers) now live out gaming experiences in the metaverse, with 38 million gamers self-identifying as metaverse enthusiasts, CTA’s gaming study also revealed.

Many consumers experienced the metaverse for the first time through gaming as their initial entry point. Fortnite emerged as an early leader in this nascent field through its combination of customization; major IP brand licensing with Marvel, as just one example; and the creation of unique in-game experiences, such as concerts from artists including Ariana Grande.

Meanwhile, Roblox, another metaverse pioneer, saw 57.8 million members on its online gaming platform, a 23% jump from last year, according to the company’s September 2022 metrics report.

Gamers foresee a future that includes increased incorporation of augmented and virtual reality to build even richer metaverse experiences, with nearly 30% saying they plan to buy a VR/AR headset in the next 12 months, CTA’s study revealed. That should come as no surprise as the 41 million Americans who identify as active and avid gamers are also serious investors in technologies that raise the challenge and complexity of content. Gamers continue to buy out retailer inventories of immersive-enabling hardware, such as 8K televisions and soundbars.

More than half of U.S. gamers already use televisions with 4K or higher quality, with 36% planning to upgrade to an 8K in the next 12 months. Some 40% will purchase gaming-caliber headsets with microphones, soundbars or surround-sound speakers and more to boost their experiences.

As the metaverse evolves in the coming years, from visual perception to more tactile experiences, haptic technologies — like the vests and gloves on display at CES 2022 from exhibitors Owo and Skinetic — will also become ubiquitous pieces of gaming equipment helping users to achieve full immersion. A Ready Player One-like gaming future may truly bring sci-fi closer to reality.

Global Gaming Revenue 2021 pie chart