ICT - Global Game Engines Market

Market Snapshot

CAGR:13.63%

2019

2027

Source: Reports and data

Study Period	2017-2027
Base Year	2019
CAGR	13.63%

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Market Summary

The Global Game Engine market was valued at USD 2.18 Billion in 2019 and is forecast to reach USD 5.96 Billion by 2027, with a growth rate of 13.63% CAGR through the forecasted period of 2020 to 2027. A game engine is a primary software of a Video Game or computer game. The software is employed to create and develop video games for mobile devices, consoles, and personal computers. Game developers utilize 2D- or 3D-based game engine software to plan and code the game fast and easily. Distinctive functions of game engines include sound, animation, scripting, Artificial Intelligence, physics engine, collision detection, and memory management. Game engines are a medium for developing a game and having full control and command over the game and it`s settings. They also save a significant amount of time by offering several libraries, effects, preset modules, and tools. The growing gaming industry is expected to drive the growth of the market. Moreover, an increasing number of mobile gaming applications are expected to boost the market growth. Also, increasing app store spending by consumers is expected to drive the growth of the game engines market. However, the high-cost constraints for smaller gaming organizations is expected to restrain the growth of the games engine market. Game engines are increasingly being used across industries like BFSI, Automotive, Architecture, and Healthcare, amongst others.

Another notable factor for the rise in the market is the changing preferences for new games by consumers and the rapid adoption of new technologies in the gaming industry, such as AR and VR, are factors that drive the growth of the game engine market.

3D game engines allow game companies to reduce their cost, time, and manpower, as game developers can use the functionalities of the engine which are easily understandable. The proliferation of gaming technology and demand for video games has led to the huge growth of the industry. Currently, there are over 100 game engines available in the market for a variety of purposes. They each have a wide range of diverse features, own performance levels, license types, and cost structures.

Augmented reality in games is a very recent concept and although development of games is taking place, there is still a huge void that needs to be filled. Nevertheless, many game engines provide AR development suites, like Unity Technologies. An AR game engine usually contains an augmented reality SDK (Software development kit), which allows developers to design, build, and test games being made. These tools also enable developers to create and edit 3D characters which then interact with the real world. With the help of these platforms, developers can assign behaviors to 3D objects and upload them for display in a camera view. The requirement of such advanced features by developers is creating a demand for AR enabled platforms.

Banks are deploying this product in a bid to ramp up gamification for better customer experience. In Architecture end use, it is also being used for providing the underlying virtual environment and let the developers focus on importing appropriate content. In the automotive end use, solutions to the likes of Unreal engine or Unity can offer real time 3D visualizations and can help render them in virtual reality which can be beneficial for the vehicle designers.

Way back in 2016-2017, Epic Games had announced that developers who sell their games made on the Unreal platform must pay 5 percent of any revenue after the first USD 3,000 earned each quarter. Unity Technologies also has a similar agreement for developers using their platforms. Although exact figures are rarely disclosed, these usually run quite high depending on the popularity of the games. Sometimes, developers are forced to make ‘paid’ version of their games even though there is a chance of them losing out their customers. Licensing costs are also an added impediment for small gaming studios who wish to monetize their creations. These cost issues need to be addressed by industry leaders if greater growth from the industry is to be expected.

Type Outlook:

Based on type, 3D type held a lion`s share in the market in the year 2019, with a share of 84.19%. 3D imaging technology, also known as 3D technology, is a branch of virtual reality disciplines which is increasingly being used in the virtual training and games. The technology can add a better visual appearance to the content. With the inclusion of 3D technology in video games, it can mainly bring stereoscopic visual effect.

3D is most commonly used in games for four major aspects, that is, scenario modeling, role modeling, particle system, and 3D engine.

Game engines form the core of the technology of game development as well as the main content of the game screen display. In the game engine, the data level function designs the quality which in turn directly influences the game research and development as well as the regular operation of the game. The composition of the game engine is complicated. The 3D type is further divided into fast 3D engines and offline 3D engines on the basis of the computing needs needed by the mainstream computer. Instant 3D images on the PC and game consoles are generated with the help of 3D engine operations

Application Outlook:

Of all the applications, the PC & Console Games held a lion`s share in the market in the year 2019 with a share of over 58.2%. Due to platforms like Steam, PC gamers have a wide range of gaming titles at their disposal and hence there are a large number of titles developed for this platform. Some game developers also create titles that are exclusive to the PC and are not available for the other modes of gaming like gaming consoles or mobile games. An additional increase in the number of PC games is currently being witnessed in the market as there is an increasing number of cloud-based games that are being deployed. Streaming games from the cloud is significantly rising and thus is increasing the number of PC games as it eliminates the hardware requirement for the PC gamer. This factor is another criteria for the rising demand for game engines across PC games applications. Graphics on the PC games (especially high-end PCs/laptops), offer smoother frame rates with higher graphic settings than what can be achieved on a standard PC.

Additionally, some titles are specific gaming console exclusive. An example of this is the game titled ‘God of War’ which is exclusively available on the PlayStation console only, and not on the PC or other platforms. Such exclusivity draws attention of the seasonal gamers to a specific game console. This trend will help drive the demand for the game engines market for console game applications.  

End Use Outlook:

Amongst the end user segments, the demand for Game Engines held the highest share across Gaming & Entertainment end use. The gaming and entertainment industry has been evolved from the past few decades, offering entertainment and other related features for children and adults alike. They have progressed considerably from the early period of computer games and versions of Nintendo and Atari. The days of pixelated screens and controlled sounds are a distant memory as video games have come to be more lifelike than ever. As technology lingers to develop, so does the gaming industry. Non-traditional gaming firms such as Facebook, Apple and Google are also putting efforts to get into this industry. The tech companies are looking for different ways to make video game streaming as natural as a streaming platform like Spotify and Netflix. Microsoft has already been into the gaming industry through its popular Xbox console and launched its video game streaming service called Project xCloud that allows users to stream Xbox titles to PCs or other devices.

In 2016, Facebook also began developing a gaming platform in collaboration with Unity technologies to create a game development framework for people to make video games. Google launched its program called Stadia, which is a cloud gaming service, which allows user to play streaming video games with extremely high quality. This can be available through phones, tablets, web browsers and desktop computers. As the development progress, the role of the game engine in crafting and designing of these titles is inevitable and projected to have a significant role in the upcoming years.

Regional Outlook:

The game engines market is anticipated to register significant growth in the Asia Pacific region. Asia Pacific is one of the key players in the market. Increasing technological advancements and rising demand, especially from countries like China and Japan are the main drivers for the market growth in this region.

China is one of the primary developers of Game Engines in the world. High population, the rising use of mobile games, rising popularity of E-Sports are the significant factors that foster the market demand in this region. With very few vendors with paid engines, the Chinese market is predominantly controlled by the free engines. The top-quality engines are usually imported from overseas producers. In 2018, China accounted for the most significant share in the global gaming market and held around 27% of the market share (televisory.com). However, it was projected that US would surpass China in 2019 due to the imposition of nine months license freezing on new titles by the Chinese officials. This measure was taken to reduce gaming among children. However, at the end of 2019, the government of Beijing, announced its plan to become the international capital of online titles latest by the year 2025. The main aim is to create a strategy built around a pretty aggressive revenue target, with the local government also involved in it.

Market-O-Nomics

• Unity Technologies published a report, the world’s leading platform for creating and operating interactive, real-time 3D (RT3D) content, there has been an increase of nearly 50% in daily active users HD games due to COVID-19. The findings of the report come from a cross-platform study fixated on COVID-19’s impact on consumer gaming ranging from the period of January 1 to mid-May 2020 in comparison to the same period in 2019, which include an in depth analysis of behaviors of the players in games, and how various titles have proven to be stable revenue generators till now, even during a global economic crisis.
• 2.5D imaging became popular in the gaming industry and animators in other fields started taking note of it by making it work in their respective fields. Many animators switched from the 3D design to 2.5D because they could finish more projects in a less amount of time.
• Cloud gaming is another concept that is being witnessed across the PC games as well as mobile games too. With the spread of 5G and better internet connectivity, cloud mobile games will see a surge in demand over the forecasted period, thus adding to the overall growth of the segment in the market. 

Companies considered and profiled in this market study

Unity Technologies, Epic Games, Chukong Tech, Crytek, Valve Corporation, YoYo Games, The Game Creators, Marmalade Tech, Idea Fabrik, Leadwerks Software, Sony, Amazon, GameSalad, Scirra, Corona Labs (Organization) and Silicon Studio Corp. have been profiled in the report. Strategies like New product development, acquisitions, and mergers and partnerships are some of the major strategies being adopted by these market players in order to retain their positions in the market.

The players operating in the market have undertaken a number of strategies related to the market in the period 2017-2020. The key highlights are:

• In March 2020, Cubic Motion joined Epic Games to partner in the development of innovative technologies enabling digitization of human appearance and motions in games.
• In March 2019, YoYo Games. Ltd. launched the GameMaker Studio 2. GameMaker Studio 2 built upon the best of its precursor with new elements and functionality that take the 2D development environment to a different perspective. Beginners with limited to no coding knowledge can translate the code, while professional developers retain access to a powerful programming language and comprehensive set of tools for advance exporting and fast deployment across all top platforms to the likes of console, mobile, and desktop.

Start-up Traction

The industry offers numerous growth opportunities. Thus, a number of startups providing innovative products and technologies have been entering the market. A few of them are Ability games and Gameberry Labs, among others.

Deals Landscape

Mergers and Acquisitions are an integral part of the Game Engines industry. Along with the companies operating in the market, other key market players have also been entering the industry.   

• In May 2020, Heroic Labs partnered with Defold Foundation in order to further support and expand open-source tools within the game development community.
• In March 2020, Unity Technologies acquired Artomatix, an Ireland-based, software company that uses AI and neural networks to streamline 3D artistic workflows.
• In January 2019, Epic Games acquired Agog Labs, which had developed SkookumScript, a powerful scripting solution and command console that is used to create AI, gameplay and high-level stage direction aspects of projects across platforms.

Expert Insights:

Reports and Data forecast promising developments for increased adoption of Game Engines technology. According to industrial experts, demand relating to the devices will increase. Moreover, new manufacturers are expected to enter the market, which is likely to provide platform-centric software solutions for production applications. New companies entering the industry would focus on innovating and providing through advanced technologies, thereby reducing complexity and lowering the overall total cost of operation. Experts also believe that increase in the adoption of science for research in emerging nations would be a key development area for the industry.

Segments Covered in the report

This report forecasts revenue growth at a global, regional & country level, and provides an analysis of the market trends in each of the sub-segments from 2017 to 2027. The scope of the report can be defined as:

For the purpose of this report, Reports and Data have segmented the global Game Engines Market on the basis of type, application, end use, and region:

Type Outlook (Revenue, USD Billion; 2017-2027)

• 2D
• 5D
• 3D

Application Outlook (Revenue, USD Billion; 2017-2027)

• PC & Console
• Mobile
• TV
• Training & Simulation
• Others

End Use Outlook (Revenue, USD Billion; 2017-2027)

• Gaming & Entertainment
• Automotive & Logistics
• Healthcare
• Architecture
• Broadcast & Live events
• Education
• Aerospace & Defense
• Others

Regional Outlook (Revenue, USD Billion; 2017-2027)

• North America
  • U.S
• Europe
  • U.K.
  • France
• Asia Pacific
  • China
  • India
  • Japan
• MEA
• Latin America
  • Brazil