Wonder

Research Outline

Prepared for Ariella L. | Delivered June 29, 2020

Growth Opportunity Assessment for Merged Puzzles and Games

Goals

The objective of the research is to identify the growth opportunities in the merged games segment of the global games and puzzles market. Specific goals are audiences' age, gender, demographics and geographical locations, which are expected to be the future demand growth drivers. 

Early Findings

According to the latest research by Newzoo, the global gaming industry that consists of PC, console and video games is expected to see significant revenue growth from $137 billion to $180 billion between 2018 and 2021. The growth is expected to be driven by mobile games on smartphones from $70.3 billion to $106.4 billion between 2019 and 2021. In the future, the mobile game's revenue is expected to account for between 51% and 59% of the global gaming industry revenue.
At present, there are approximately 2.3 billion users who play games worldwide. In 2017, the male audiences represented the majority of game players across mobile, PC, and console devices. In mobile games, male and female were close in their market shares (52% vs. 48%).
The console and PC games segment are expected to capture about half of the global gaming revenue, in which the former generates $34 billion and the latter generates $32 billion. As one of the major players in the gaming industry, Zynga has launched Merge Magic, Merge Dragons, and Empires&Puzzles, which have been the company's recent growth driver.
In 2018, Zynga, the global leader in interactive entertainment, acquired the Turkish mobile entertainment developer, Gram Games, for $250 million. Gram Games is expected to generate over $100 million in revenue per year. There are more than 1 billion users who have played the Zynga games since 2007.
The global games and puzzles market generated a revenue of $11.88 billion in 2019, which is expected to achieve a CAGR of 18.6% between 2020 and 2027 and reach $47.83 billion. The puzzles segment represented 39.6% in market share, which was driven and is expected to continue to be driven by the educational puzzles for kids and teenagers. 
As part of the trend to develop the brainpower of children in their early ages, educational institutions, such as those in India, have deployed games and puzzles to enhance their teaching methods and interactive learning experience to children. The increased adoption of puzzles is also driven by enhanced visual memories and cognitive skills in playing the 3D puzzles. 
The North American market has seen significant market growth driven by the puzzles segment. In the US, some puzzle retailers have started to offer a variety of puzzles targetting kids and teenagers. Crowdfunding platforms also offer an avenue for freelancing puzzle developers to earn revenues. 
Although the Asia Pacific region dominated the global games and puzzles market with a 45.2% market share in 2019, revenue growth has been driven by board games in the two largest markets - China and India - in the region. However, the innovative features in board and card games are expected to attract millennial players in the future.