Gaming = $2.1 Trillion Market Cap

Gaming = $2.1 Trillion Market Cap

Today, the public market valuation of all video gaming companies is $2.1 trillion. This is 2.4% of the ~$87 trillion in global GDP. The game industry’s value is often cited in relation to revenue generation. Most of that is typically estimates of game sales, private data, and broad assumptions. Given that the gaming industry (public + private companies) is currently estimated at ~$180B in annual revenues, this industry on aggregate trades at an approximate multiple of ~11.6x revenue.

One of the more interesting data points that came from this report by Games One is that “5.90% of NASDAQ’s total wealth comes from games, 4.97% of the Hong Kong Stock Exchange’s total wealth comes from games, and 2.99% of the Tokyo Stock Exchange’s total wealth comes from games.” We fully expect gaming’s percentage contribution to global GDP to expand over the coming decade. As a VC fund that generates its returns based on enterprise values at exit, we are encouraged by these tailwinds in the industry.

We fully expect gaming’s percentage contribution relative to global GDP to expand over the coming decade. Gaming is becoming one of the main tenants of entertainment, social interactions, and personal time. This was clearly accelerated by the pandemic with 55% of Americans (The Verge) turning to video games in 2020 yet that growth is not slowing. We expect that this will continue and that we will see the game industry’s growth exceed that of the growth of global GDP.