Bain & Company

The leadership team of Bain & Company's Global Gaming Sector practice prepared this report, with special direction from Anders Christofferson, partner and Global Gaming Sector lead, and Brandon Rogers, Media practice manager. The authors would like to thank Danielle Schwenker, Aman Sharma, Gunjan Dawar, Shray Arora, Rohan Doomra, Shagun Jain, and Christoffer Karlsmose for their contributions to this work.

The gaming industry is experiencing a period of tempered growth, characterized by a significant downward revision in long-term revenue forecasts. While the market reached $202 billion in 2025, annual growth is now projected at a modest 3%, with expectations for 2029 revenue set at $232 billion. This represents a notable cooling compared to previous industry outlooks, as analysts suggest the sector has largely saturated its available audience and reached a plateau in total media consumption time.

These findings are based on a June 2026 survey of 5,339 gamers across eight global markets, including the US, UK, Japan, Brazil, India, and Saudi Arabia, alongside industry data from sources such as IDC and PwC. The analysis highlights a highly fragmented landscape where player preferences vary significantly by age and geography. Notably, interest in user-generated content and sandbox titles declines sharply with age, while the most active 20% of players account for 59% of total playtime and 73% of total spending.

Strategic focus has emerged as a critical determinant of commercial success. Projects with clearly defined target audiences demonstrate an 83% success rate, compared to 50% for those without. While artificial intelligence is increasingly utilized to accelerate production, it is not viewed as a panacea for poor strategic planning; rather, it may cause unfocused studios to fail more rapidly.

Distribution strategies are also shifting toward direct-to-consumer (D2C) models to capture higher margins. While 68% of the gaming audience is aware of D2C payment options, conversion remains a challenge, as in-app purchasing remains the preferred, more convenient method for most players. Consequently, developers are increasingly leveraging personalized offers to incentivize web-store usage, as these targeted strategies prove significantly more effective at driving conversion than broad-based discount incentives.

The global video game market, valued at $196 billion in 2023, is entering a period of sustained expansion with a projected annual growth rate of 6% through 2028. This upward trajectory is primarily fueled by younger demographics who increasingly utilize gaming environments as essential hubs for social interaction, creative expression, and commerce. To capitalize on this shift, industry leaders must pivot away from traditional, siloed development toward immersive, cross-platform ecosystems that prioritize interoperability and the integration of user-generated content. Expanding intellectual property across diverse media formats is now a critical requirement for maintaining relevance and maximizing consumer engagement.

The industry is simultaneously undergoing a structural transition toward a hardware-agnostic model, necessitated by the rise of cloud-based distribution and the demand for seamless, multi-channel experiences. As market saturation intensifies, the high failure rates observed in mobile gaming underscore the need for more rigorous operational discipline. Companies are increasingly required to align product development, finance, and marketing functions through data-driven strategies. By leveraging artificial intelligence to optimize user acquisition and retention, organizations can better navigate the volatility of the current landscape and address the growing disparity between headcount expansion and actual revenue growth.

To secure long-term viability, gaming organizations are modernizing their internal structures by standardizing development tools and fostering entrepreneurial autonomy. This evolution includes a holistic integration of generative AI into core workflows to improve operational efficiency and scale production capabilities. Furthermore, as competition for specialized talent intensifies, firms are refining their compensation and support models to align with broader technology industry standards. These combined technological and organizational shifts are essential for navigating current market turbulence and ensuring that gaming entities remain competitive in an increasingly complex and interconnected digital economy.

The report demonstrates that the global video‑game market reached $196 billion in 2023 and is expected to grow at roughly 6 % per year through 2028. Growth is driven by a youthful demographic—80 % of players aged 2‑18—who devote nearly one third of their entertainment time to gaming. These gamers increasingly engage in immersive, cross‑platform ecosystems that combine social interaction, co‑creation and real‑world extensions of game IP. Their spending per hour can be up to five times higher when they participate in multiple activities, underscoring the commercial value of integrated experiences.

Key findings reveal that 70 % of players use multiple devices and 90 % desire a single consolidated marketplace, with half willing to pay for it. Publishers are therefore urged to develop device‑agnostic platforms, strengthen direct relationships with players and employ data‑driven marketing. In the mobile sector, an 80 % failure rate after three years contrasts sharply with a 10–25 % failure rate in software and retail, highlighting the need for highly targeted paid performance marketing, rigorous A/B testing and tight alignment across development, finance and marketing teams. Long‑term acquisition and retention strategies, coupled with generative AI for ad creation and optimization, are identified as critical success factors.

Operating models at leading studios are shifting toward standardised core tools, autonomous entrepreneurial teams with clear milestones and strategic embedding of generative AI. Talent attraction now demands a comprehensive package that includes purpose, competitive pay, work‑life balance, learning paths and ESG commitments to remain competitive with the broader tech industry. The report’s thesis is that understanding diverse gamer segments, delivering interoperable cross‑platform experiences and investing in data‑driven, AI‑enhanced operations are essential for capturing the rapidly expanding, monetarily active gaming audience.