Not long ago, video gaming was considered a niche pastime, reserved for teenagers and hobbyists. Fast forward to today, and gaming has become one of the most dynamic entertainment markets in the world—larger than film and music combined. With an estimated 3.3 billion gamers worldwide in 2024, heading toward 3.5 billion in 2025, the sector is no longer just an interesting subplot; it is a global phenomenon that equity investors can no longer afford to ignore, states Jeremy Gleeson, CIO Tech Equity at Allianz Global Investors.
Gaming has reached a scale and maturity where it deserves serious attention from long-term investors. We see powerful structural trends and specific catalysts that could drive meaningful value creation in the coming years.
A $500 Billion Market in the Making
The global gaming industry is currently valued at roughly USD 200 billion. By 2030, forecasts point to a market of USD 500 billion, implying a double-digit compound annual growth rate. In the U.S. alone, growth is expected to average around 12% per year.
Gleeson emphasizes that gaming’s growth is not merely cyclical. Unlike other entertainment forms, the sector stands out for its constant reinvention of business models—shifting from packaged games to digital downloads, live services, and now subscription models. This adaptability keeps the industry fresh and appealing.
Publishers are increasingly relying on live services and higher AAA title pricing (now often above USD 70 per game). This allows for recurring revenue streams, higher margins, and more predictable cash flows than the one-off sales of earlier generations.
Blockbuster Launches as Market Catalysts
Few sectors offer such powerful single-event catalysts as gaming. In mid-2025, Nintendo launched the Switch 2 console, selling 3.5 million units in just four days—an acceleration compared to the original Switch, which sold 2.7 million units in its entire launch month back in 2017. Analysts quickly raised their software forecasts and boosted their outlook on Nintendo.
The next major event on the horizon is the long-awaited release of Grand Theft Auto VI, slated for May 2026. Its first trailer alone generated an astounding 475 million views within 24 hours, breaking records and underlining the sheer cultural impact of the franchise.
Gleeson notes that major launches go beyond entertainment milestones; they mark pivotal moments for both earnings and market sentiment. Ignoring them can mean overlooking significant upside potential for investors.
The Generational Effect
Another structural driver is what AllianzGI calls the “cohort effect.” Unlike previous generations, today’s gamers don’t abandon the hobby as they age. On the contrary, many continue gaming well into adulthood, while younger children are starting earlier. Current 15-year-olds began gaming around age 7, while today’s 43-year-olds typically started at 13.
According to Gleeson, the total addressable market is not only expanding but also deepening. Each new cohort of gamers builds on the existing base instead of replacing it, creating a powerful compounding effect for the industry.
What Investors Should Watch
For equity investors, the gaming sector now offers multiple earnings engines: console hardware cycles, blockbuster software launches, recurring live services, and pricing power in AAA titles. Still, execution matters.
Gleeson highlights several key metrics to watch: the pace at which new hardware is adopted, the attach rate of software to consoles, average revenue per user from live services, and the industry’s capacity to maintain premium pricing.
With the Switch 2 ecosystem gaining traction and GTA VI on the horizon, AllianzGI believes 2025–2026 could mark a watershed period for the industry.
The Bottom Line
Gaming has officially gone mainstream. With billions of engaged users, innovative monetization models, and blockbuster releases that move both culture and capital markets, the sector presents investors with opportunities too large to ignore.
Gleeson concludes that gaming has moved beyond being a subculture and is now an integral part of the global economic and social landscape. For investors who embrace it, the potential rewards over the next decade could be transformative.
