The videogames market - Italy (2023)

1.2 The global market

In ****, the global video game market reached a value of $***.** billion. Future forecasts indicate sustained growth for this industry in the coming years, with a compound annual growth rate (***) estimated at **.* percent. The global market could then approach a total value of $*** billion by ****.

Video game market World, ****-****, in billion dollars Grandviewresearch

The digital format of video games dominates the world market. In ****, ** percent of console video games sold were in digital format while the physical format garnered only ** percent. Breakdown of video game sales by format World, ****, % Mynintendonews

1.3 The Italian market

The gaming market in Italy is growing strongly, and future forecasts outline a positive trend in the coming years. In ****, the Italian market reached a value of **.** billion euros. Between **** and ****, a compound annual growth rate (***) of *.* percent is projected under which the market could exceed a total value of ** billion euros.

Gaming market Italy, ****-****, in billion euros Globenewswire

Regarding the gaming segment, the Italian market has been confirmed to be growing in recent years. Between **** and ****, the value of the market grew by **.*%. However, it should be pointed out that the growth is mainly concentrated between **** and ****, when due to the outbreak of the pandemic and the restrictions imposed, the video game market grew by **.*%. Between **** and ****, the market maintained a stable value of *.** billion to *.** billion.

Video game market Italy, ****-****, in billion euros Iidea

Considering sales of video game hardware and software, the second sub-segment dominates sales, with *.** billion euros or **.* percent of the total. The value of hardware, on the other hand, is *** million euros (***).

Video game market, breakdown by segment Italy, ****, in % Iidea

Finally, considering the software sub-segment, digital versions of video games for PC and Cosole are the most sold in **** with a total ...

1.4 The consequences of the Russian-Ukrainian conflict

The outbreak of the Russian-Ukrainian conflict in February **** resulted in, among other things, a general increase in the consumer price index. The video game industry is not exempt from this increase. Looking at the consumer price index for games and hobbies, which include video games, it can be seen that between **** and **** this has increased by * points. This means that over a two-year period, prices for this category of goods increased by * percent. However, it should be pointed out that unlike other sectors that of games and hobbies was not particularly affected by the outbreak of the conflict. In fact, between January **** and October ****, the price index increased by less than * points, representing a *.* percent increase in ** months. Consumer price index for games and hobbies Italy, ****-****, base ****=*** Istat

The increase in consumer prices is merely a reflection of the increase in production costs. Between **** and ****, the producer price index for software, computer consulting and related activities increased by nearly * points. Specifically, between January **** and June ****, output prices increased by *.* percent. Compared with ****, software production and IT consulting increased by **.* percent.

Output price index of software, IT consulting and related activities Italy, ****-****, base ****=*** Istat

However, it is not possible to ...

2.1 Demand in Italy

In order to analyze the demand for video games in Italy, trends in spending on them over the past * years, trends in the number of video gamers over the past * years, and the amount of hours played over the past * years are considered.

Spending on software

Between **** and ****, Italians' software spending grew by **.*%, from €*.** billion to €*.** billion. The largest growth is recorded by the App format, which grew by **.*% during the period under consideration; it is followed by the digital segment for PCs and Consoles with +**.*% while the physical format in * years dropped by **.*%.

Spending on software, type breakdown Italy, ****-****, in millions of euros Iidea

Number of video gamers

Despite the increase in spending, between **** and **** the total number of video gamers fell in Italy. If in **** there were **.* million gamers in **** these dropped to **.* million (***).

Number of players Italy, ****-****, in millions Iidea

Weekly hours of gaming

Finally, regarding the number of weekly hours videogamed, between **** and **** these appear to be on the rise, from *.** hours per week in **** to *.** hours per week in **** (***) while between **** and **** the number of hours video played per week drops, -**.*%.

Amount of hours played per week Italy, ****-****, in numbers Iidea

2.2 Demand drivers

The age and gender of players are considered to analyze the drivers of demand.

Age

Regarding age, it is possible to identify two main age groups in which the demand for video games is concentrated. Teenagers and baby boomers are the two population segments that drive the demand for video games. In fact, in ****, **.*% of video gamers are between the ages of **-** and **-** (***). This is followed by the **-** and **-** age groups, with *.* million and *.* million gamers, respectively. Finally, the youngest age group, *-** years and **-** years, garner *.* million and *.* million gamers, respectively.

Number of video gamers by age group Italy, ****, in millions Iidea

Gender

Then considering gender, men historically gather the highest percentage of video gamers. This trend is confirmed again in **** with men accounting for ** percent of demand and women for **. In addition, between **** and ****, the trend that emerges clearly shows a decrease in the female component among video gamers, with a decline of * percentage points (***).

Type of gamer, breakdown by gender Italy, ****-****, % Iidea

2.3 The preferences of video gamers in Italy

Italians' preferences can be analyzed in light of three different categories: device used, Pegi rating, and video game genre.

Devices

Among PCs, Consoles and mobile devices, the last ones are Italians' favorite for video gaming, with more than */* of video gamers playing on mobile devices (***).

Devices used for video gaming Italy, ****, % Iidea

PEGI classification

PEGI is the pan-European video game classification system, designed to educate consumers on the proper purchase of video games and to protect minors from accessing video games with content that is potentially inappropriate for their age. In ****, games classified as Pegi *+ are the biggest sellers, **.*% of the total. They are followed by Pegi *+ games with just over */* of total sales (***). Video game sales by Pegi classification Italy, ****, % Iidea

Finally, it is possible to delineate the preferences for each gender regarding video games based on the device used to play the game. A summary table of preferences is proposed below.

DEVICE WOMEN MEN PC Family (***) Strategy (***) Arcade (***) Adventure (***) Adventure (***) Role-playing (***) CONSOLE Family (***) Sports (***) Adventure (***) Racing (***) Sports (***) Adventure (***) MOBILE DEVICE Brain/puzzle (***) Brain/puzzle (***) Trivia (***) Trivia (***) Role-playing (***) Role-playing (***) (***)

Top-selling video games in ****

Most downloaded free apps in ****

2.4 New demand trends: metaverse and cloud gaming

Two of the main trends of gamers are gaming in the metaverse environment and cloud gaming:

Metaverse

Gaming in the metaverse environment represents a significant trend, transforming the way games are played and experienced. it is a fusion of virtual reality (***).

In ****, the global gaming market in the metaverse reached a value of $**.* billion, and this market is expected to expand dramatically in the coming years. Between **** and ****, a compound annual growth rate (***) of **.* percent is expected, thanks to which the market could touch a value of $*** billion by the end of the period.

Gaming market in the metaverse World, ****-****, in billions of dollars Marketsandmarkets

Cloud gaming

Cloud gaming offers players the ability to access games based on remote servers, thus reducing the load on local devices and giving developers the freedom to create more innovative gaming experiences. This growth is fueled by features such as online game progress saving and seamless file streaming, which drive market expansion With the advent of *G technology, which enables high-speed, low-latency connectivity, cloud gaming is expected to flourish even more. Companies such as Microsoft with its Xbox Cloud Gaming service are already leveraging these technologies to deliver immersive gaming experiences without the need ...

3.1 The market structure

To analyze the market structure of video games, the number of enterprises active in the video game development industry, the number of employees, the size of enterprises, and the sources of enterprise financing are considered.

Enterprises

Between **** and ****, the number of enterprises active in the video game development sector appears to be growing. While there were *** enterprises active in the sector in ****, there are *** in ****, a growth of ** percent over the period. The trend is positive during the entire period while the growth is particularly concentrated between **** and ****, a period during which the number of enterprises increased by ** percent.

Game development studios Italy, ****-****, in numbers Iidea

Employees Between **** and ****, the number of employees shows greater growth than the number of companies, a symptom of market concentration around leading companies. During the reporting period, the total number of employees grew by ***.* percent, from *** to *,*** within * years. Again, the trend is positive during the entire period is the growth is concentrated in the years between **** and **** (***). Employees game development enterprises Italy, ****-****, in number Iidea Size of enterprises In terms of the size of enterprises active in the industry, microenterprises dominate the sector in ****. In fact, enterprises with *-** employees account for ...

3.2 The value chain

The Testing and Quality Control phase, is one of the most critical phases during the design of a video game. This phase aims to ensure the stability, playability and safety of the final product. Here is a more detailed examination of this phase:

Internal Testing (***) Test Case Development: creation of detailed test scenarios to evaluate every aspect of the game, from mechanics to graphics. Initial Debugging: identifying and correcting bugs and technical problems found during the early stages of development. User Experience Evaluation: making sure that the user experience meets the initial expectations of the game design.

External Testing (***) Recruitment of external testers: involves including external players in the development process to obtain unbiased feedback. Public Feedback: analysis of feedback from beta testers to identify problems not detected during internal testing. Stress Testing: evaluation of game stability and performance under high workloads or suboptimal network conditions.

Quality Control Regulatory Compliance: ensure that the game complies with local and international laws, such as age rating and privacy regulations. Quality standards: adopting industry quality standards to assess aspects such as game design, accessibility, and inclusiveness. Platform certification: obtaining necessary approvals from distribution platforms, such as console and app stores, which may have their ...

3.3 The main manufacturers

The following is a list of leading Italian game developers and publishers:

Milestone s.r.l: is a company with Milanese roots, founded in **** as Graffiti, renamed Milestone in ****. Their notoriety in the racing video game industry began with the game "Screamer," which established the company as a leader in the PC driving game industry. Over the years, collaboration with major publishers such as Electronic Arts and the production of licensed games such as the SBK and MotoGP series have consolidated their know-how. Since ****, Milestone has started publishing independently, with titles such as MXGP and Monster Energy Supercross and its own IP, RIDE. In ****, the company joined the international PLAION group, continuing its expansion and establishing itself in the racing video game industry.

Reply s.p.a: a company founded in **** in Turin by a group of managers in the IT sector, the company operates with a network model that includes dozens of subsidiaries, each focused on a specific area of business. Reply is active in a variety of areas, including big data, cloud computing, digital media and the Internet of Things (***). Reply Game Studios is a game development studio part of the Reply Group. Founded in ****, the company focuses on ...

3.4 Geographical distribution of producers

In order to analyze the geographic distribution of the market, a map was created with the percentage of video game producers for each Italian macro-region.

The distribution along the peninsula appears to be uneven. The Northwest gathers almost */* of the producers, accounting for **.*% of the total. This is followed by the Center with just over */* of the companies (***) and the Northeast with **.*% of the total. The South and the Islands collect **.* percent and *.* percent, respectively, falling significantly behind the rest of Italy in percentage terms.

4.1 Type of the offer

A video game is a game operated by an electronic device that allows interaction with images on a screen, generally identified as software, but sometimes it can also refer to hardware dedicated to a specific game. This form of interactive entertainment has developed since the ****s, with the introduction of consoles such as the Magnavox Odyssey and coin-operated games such as Atari's Pong, kicking off the gaming industry. Video games are strongly linked to technological advances, making them a unique and ever-evolving medium. They are accessible on a variety of platforms:

Consoles: dedicated devices such as PlayStation, Xbox, and Nintendo Switch. PCs: personal computers, which offer a wide range of games through platforms such as Steam. Mobile devices: smartphones and tablets, which host downloadable games from app stores. Virtual Reality: VR devices that offer immersive experiences. Cloud Gaming: services that allow gaming via streaming without the need for dedicated hardware.

Available formats are:

Physical: usually in the form of a disc or cartridge, it mainly affects devices such as PCs, Consoles and handheld consoles Digital: represents the preferred format for video gamers with **.*% of sales value in ****. Video games in digital format are available on almost all devices, including mobile devices ...

4.2 The prices

The following are the sales prices of some video games available on Console, PC and mobile devices. Video games are divided by format: physical/digital and paid app.

Physical/digital

Paid app

(***)

4.3 New supply trends: virtual reality and augmented reality

Major supply trends highlight the fact that video games will be increasingly influenced by the development of new technologies and their commercialization. Consider, for example, accessories for the enjoyment of virtual reality that all of the world's largest providers are working on to bring the gaming experience to a more immersive level. The following is an analysis of the two major trends regarding virtual reality (***):

Virtual reality represents the future but also the present of video games. In fact, it represents the present because it is already there today, but it represents the future because the trend is to turn VR as the base and not the specialty. So much so, that even social will most likely move into the virtual, thanks to the Metaverse. The socializing of the future could begin or take place completely virtually, with optical viewers, taking us to any virtual place in the Metaverse and bringing us together with friends and new people in virtual clubs, concerts, and exhibitions. The metaverse will develop the social aspect of video games, as it will provide players with an environment designed for communication and sociability, where they can also build relationships through the elements that will make up the ...

5.1 The legislation

The video game market, as with many other digital products, is regulated by various laws and regulations at both the national and European levels. These laws are concerned with ensuring the quality, protection and safety of consumers and developers. Some of the main laws and regulations for the video game market in Italy are:

Directive (***): concerning certain aspects of contracts for the provision of digital content and digital services. Court of Cassation ruling No. **** of ****: states that video games are intellectual works and, therefore, are protected by Law ***/**. MiC and MEF interministerial decree of May **, ****: establishes that video game producers are entitled to a tax credit of up to **% of the eligible cost of production of video games to which Italian nationality is acknowledged, up to a maximum of €* million per year for each production company or group of companies. Resolution **/**/CONS: establishes the regulation on the classification of audiovisual works intended for the web and video games, Legislative Decree No. *** of December *, ****: reforms the legislative provisions on the protection of minors in the film and audiovisual sector. PEGI (***): establishes a player's suitability for a game using age as the main criterion. Thus, it is the suitability of the content and ...

6.1 Segmentation

Italians

Foreign

• Activision Blizzard
• Electronic Arts
• Epic Games
• Nintendo
• Digital Bros s.p.a
• 505 Games s.p.a
• 505 Games s.p.a
• Reply s.p.a
• Milestone s.r.l