Video games, regardless of computing platform, are big business. Over the past 50 years or so, revenue from video games has grown significantly. While PCs may have outperformed dedicated gaming consoles over the past decade, their combined revenue still doesn't compare to the behemoth that is portable gaming.
VisualCapitalist has put together an infographic of the video game market since 1970 that highlights the growth and evolution of the industry over the years. From 1971 when arcades earned $1 billion (adjusted for inflation) through games such as "Pong", by 2022 gaming revenue reached $180 billion. With some of the biggest and most popular games launched last year, that number is likely to be even higher in 2023.
Console gaming has been outperforming PCs for decades. Famous consoles from the 1980s, 1990s and 2000s meant the console market often made more money, but that changed in 2013. The year StarCraft II came out, PC games made $1 billion more than consoles, and the PC platform has held a commanding lead ever since.
In 2022, the console market will reach $30 billion in revenue, while PC gaming revenue will reach $45 billion. But even the two combined can't compare to mobile gaming, which reached $101 billion. The data, provided by UK market intelligence firm PelhamSmithers, measures revenue rather than sales of individual games, which is why mobile games are so profitable because they mostly feature free-to-play and micro-transaction models.
The chart also shows the decline of arcade gaming after its peak in the mid-1980s. Arcade games may have declined in popularity, but they still generated $2 billion in revenue in 2022.
It's also interesting to look at the data on the handheld console market, which peaked in the mid to late 2000s thanks to the emergence of the Nintendo DS, but the launch of the iPhone in 2007 marked the beginning of the end for traditional handheld gaming. The industry has failed to cross the $1 billion threshold since 2020 - in this report, the Nintendo Switch is classified as a portable console rather than a handheld console.
The chart also includes virtual/augmented reality platforms. Since the launch of the first Oculus Rift in 2016, revenue from this market has regularly exceeded $1 billion. It will peak at US$6 billion in 2021 and drop slightly to US$5 billion in 2022.