Why Unionization Is Not Enough Part 2: A Tale of Two Audiences

Despite world beating earnings gaming has too small an audience share emotionally and culturally connected to games to generate constituent power due to split between mobile F2P & PC/console

“Video games are bigger than movies” is a notion as misleading as it is thoroughly repeated. On its face it seems intuitive given that billions of people technically play video games while collectively paying upwards of $185B in the process, readily dwarfing movies at $26B in 2022.

What’s given plenty of lip service but not much thought is that these billions of people may share a pastime but what they don’t share is a market. The number of enthusiast players who play on mobile is roughly at ~40% of total. If your definition of enthusiast gamer includes someone without an active Steam account or who doesn’t own a current-gen game console (PS5, Xbox Series S or X, Nintendo Switch) I don’t think you’ll get much out of this line of thinking but for the rest of us here’s some back of the laptop math.

Considering that there are around 120M active Steam accounts and somewhere around 200M total current gen consoles sold this indicates at most 320M “enthusiast” users. Not allowing for any overlap between multiple consoles and PC that’s ~320M enthusiasts. An incredibly generous figure considering 138M of those are Switches, which most users famously own as a second console since it doesn’t play most big AAA franchises. The real figure is probably closer to 250M but let’s run with 320M. 40% of which puts us at 128M enthusiast / mobile straddlers. That 128M may sound huge but in context it’s minuscule. Out of the roughly 2B mobile players in the world that comes out to about 4%.

That means 96% of the so-called “gamer” market don’t engage with the vast majority of critically acclaimed and culturally relevant games. And 60% of hardcore enthusiasts doesn’t engage with the games making the most money and enjoying the biggest audiences on the planet. This is not a 3B person market, it’s a 2.8B person market and a 320M person market with a largely incidental 128M person overlap.

The markets are structured very differently not just when it comes to size but homogeneity as well, especially when it comes to purchasing potential. Console and PC player spending averages are different (PC players spend twice what console players do) but they both pale in comparison to the amounts mobile players spend. In the best monetizing genres mobile ARPU outstrips PC/ console up to 25 times and gets closer to real money online poker ARPUs.

Again we see two markets. A small, fanatical, contiguous PC/console core market that if anything already monetizes too well with a high spend floor but a fairly low ceiling, conversion rate hovering around ~80% translating into revenues that are multiples of content markets with much larger user numbers like music, video and content. Then a second market, ironically the vastly better monetizing one with a completely separate business model, with a spending floor of pennies but with an outrageous and functionally unlimited ceiling.