An Investigation of Current Trends in Digital Gaming Markets and Recommendations for Turkey

Abstract

Fast development in both hardware and software technologies is making computers cheaper and more powerful day by day. This development also increases the market size of both hardware and software products. Digital games cover a significant portion of these markets. While it is hard to strictly classify the games, one can categorize them by their platforms and types. Popular gaming platforms are computers (PC), consoles, mobile phones/tablets, handheld devices, and electronic boards, yet many games are cross-platform. All platforms have different characteristics and revenue models. On the other hand, game types are more divergent. Some of them are adventure (incl. first/third person shooter), role playing, puzzle, strategy, action, arcade and simulation. However, the revenue streams are more dependent on the games being online or offline. While offline games mostly rely on sales of the game and its expansion packs/downloadable contents; online games have different models, like subscriptions, coin/credit sales, item sales, advertisements etc.
In this study, we put emphasis on the global economy of the digital games and the related trends. We also focused on the current situation in Turkey and provided suggestions regarding ways to improve the market shares of sales and revenues as well as the production rates. With the huge development in the gaming industry, especially thanks to the contribution of the online games, the total market cap reached $70.4 billion in 2012, $91,8 billion in 2015 and reached $101.1 billion in 2016, with an average annual growth rate of 11%. It is estimated that the total market size will hit $128.5 billion in 2020 with another average annual growth rate of 7%. Therewithal, in Turkey, the market size was 755.5 million in 2016, making her the first in the Middle East and Africa region and 16th in the World.
The gaming industry and its market is not only limited to sales and revenues. Besides, it is a major area of employment, which includes software development, coding, graphical design, script-writing, marketing and many other technical/non-technical jobs. For instance, in the UK, as of 2017, 12100 employees directly work in the gaming industry in 2175 active companies. These jobs nowadays require considerably qualified personnel. So that many graduate and some undergraduate programs are being offered in universities throughout the world as a result. Again, in the UK, 231 games-related courses are offered in 94 universities and academic institutions. While these facts make the UK one of the biggest actors of the industry, Turkey is following the trends from behind. Middle East Technical University (METU), one of the leading universities in Turkey, offers the (very first) game technologies master’s program since 2009, and Istanbul Technical University (ITU), another leading university, recently started to offer such a program in 2017. A few other universities offer related programs, but the number is relatively very small when compared to industry-leader countries. Likewise, as of 2016, the number of active game companies is only 50, which is also very few when compared. Turkey, with a population near 80 million and 22.8 million gamers, is potentially a big market and have a big potential to become a leading producer. Things Turkey can do to break through include; promoting new academic programs, tax incentives for gaming companies and startups, establishing game-oriented technology development zones, starting public campaigns, contests and events regarding game development. These events should contain talks, courses and certificate programs from local and foreign experts. Moreover, fight against piracy of games and software, which strictly lowers the sales, revenues and eventually the production, should be a top priority for the authorities.

Full text

AN INVESTIGATION OF
CURRENT TRENDS IN
DIGITAL GAMING MARKETS
AND RECOMMENDATIONS FOR
TURKEY
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