Video games don’t get the headlines for technology giants like Facebook, Alphabet, and Amazon.com, but make no mistake — these companies are aggressively competing to control a meaningful share of the $100 billion video game industry.
The video game industry is growing about 6% per year, with mobile gaming serving as one of the key drivers of that growth. In addition to mobile gaming, two new markets — e-sports and virtual reality (VR) — are small but growing fast.
Game developers need the cloud
People are beginning to spend as much time playing games as they do on social media or on streaming services like Netflix. One reason is that technology advancements on smartphones and tablets are gradually making mobile games more complex, like console or PC games. But, this growth in mobile gaming is placing a burden on game developers without the expertise to provide online infrastructure that can support the huge spikes in usage when new updates or content are released for a particular game.
The concept of someone paying to go to a venue to watch others compete in a video game might seem strange to most, but this is a $1 billion market that is growing fast.
The global e-sports audience is estimated to be 385 million and could grow to 500 million by 2020, according to Newzoo. Because the great majority of e-sports fans watch competitions online, the e-sports opportunity plays right into the hands of companies like Alphabet and Facebook that already have social platforms in place to connect people with content.
While Facebook is trailing YouTube and Twitch in e-sports, Facebook is investing heavily in VR, which is expected to become a $45 billion market by 2025, according to Grand View Research. The social-media giant purchased Oculus — the maker of the Rift headset — for $2 billion in 2014.