Worldwide spending on games is estimated to hit US$112 billion in 2015, nearly double the US$67 billion recorded in 2010, according to a new report from Gartner.
Global games expenditure in 2011 will exceed US$74 billion, a year-on-year increase of 10.4 percent, the research firm said Tuesday in a statement.
The research firm said games software will account for more than half, or US$44.7 billion, for the overall spend in 2011. The trend, it added, is expected to continue over the next five years as the software component absorbs almost two-thirds of consumers' game budgets.
Hardware and online games will contribute US$17.8 and $11.9 billion, respectively, to the games industry in 2011.
"[The] large market size means that many consumers embrace gaming as a core piece of their entertainment budget and will continue to play as long as game publishers deliver compelling and fun games," said Fabrizio Biscotti, research director at Gartner, in the statement.
Within the software segment, Gartner expects mobile games to experience the largest growth opportunity, with its market share poised to increase from 15 percent in 2010 to 20 percent in 2015.
Tuong Nguyen, principal research analyst at Gartner, attributed this phenomenon to the rising popularity of smartphones and tablets and games being the most downloaded category of apps in appstores.
While software is on track to contribute the majority of game expenditure over the next few years, online games will be the fastest growing segment during the forecast period, according to Gartner. It expects global online game spend to increase at a compound annual growth rate of 27 percent through to 2015, with consumer spending on subscription fees slightly declining while spending on virtual goods will grow exponentially.
Brian Blau, research director at Gartner, explained that the increase in dollars devoted to virtual goods was due to the rise of social games, whereby online games are linked to social networking sites and social networking platforms.
"Subscription fees are giving way to 'freemium' models, in which the game is provided for free to gamers but is monetized through…in-game advertising and display advertising, and in-game microtransactions such as the sale of value-added services or virtual-good purchases," he noted.
Blau added that users have become multichannel-oriented by choice and expect vendors to continue delivering quality content and experiences by extending their gaming possibilities across several platforms.
"If today's mobile technology does not evolve quickly enough, the games industry is set to see the rate of innovation severely decline," he said. "Alternatively, it will provide opportunities in technology and content genres that we can't foresee today."