Tech Giants all want a piece of the gaming pie – Here’s Why!

While many industries struggle to navigate the global pandemic, several sectors have seen their numbers soar.

And when it comes to online gaming, business is booming.

Globally, the online gambling market is expected to jump from USD 64.13 billion in 2020 to USD 72.02 billion in 2021, according to the Online Gambling Global Market Report 2021. That’s a compound annual growth rate (CAGR) of 12.3 per cent. In India, where gambling remains restricted in most places outside of horse racing and lotteries, the online gambling industry has grown by around 20 per cent every year. At that rate, India’s gambling market could exceed $1 billion this year, according to the India Post, with more sites now offering games like slots, blackjack, and poker in rupees. Moreover, thanks to the proliferation of trustworthy casino portals like AskGamblers, the numbers are expected to increase.

But it’s not just gambling that’s fuelling the growth. Online gaming, in general, has also surged during the global pandemic, as millions across the world stay home and look for ways to pass the time.

Now? Everyone wants a piece of the gaming pie – none more than Big Tech companies.

Who’s getting involved

The number of companies now getting involved in the online gaming and gambling industry is like a who’s who of the biggest tech giants in the world. Amazon. Facebook. Google. Apple. Microsoft. All have made gaming a strategic priority in recent years.

“For many years, the game industry was somewhat overshadowed by music and movies and was always trying to justify itself as a form of mainstream media and entertainment.” Phil Harrison, a Google vice president and general manager and long-time game executive, told Protocol back in April 2020. “Now, games are far and away from the largest entertainment medium on the planet from a digital perspective, so that global scale and size are attractive to the large technology companies as a way of bringing their products and services to more people.”

Advancements in tech mean better user experience.

For Big Tech, the name of the game is staying ahead of the curve.

And that means giving users an overall more enhanced experience. No more simple digital card games. Advanced technology now means users get more of a visual experience when they play slot and casino games. That, in turn, leads to new users. Why pay airline, hotel and food and travel fees to visit a big casino when you can get the same gambling experience from your home at a fraction of the cost?

The same goes for another burgeoning market, eSports gambling. Currently, most providers are only offering outrights and money lines. But, according to Picante Today, some providers might soon allow users to place live bets on their favourite streamers. Again, this type of enhanced user experience is expected to draw even more gamblers to eSports.

According to Market Business News, Big Tech’s involvement also means an improved win rate for many users, as tech-enhanced sportsbooks, live betting, and customizable algorithms make predicting outcomes much easier.

Why is the popularity surging?

It’s easy to point to the pandemic as the sole or primary reason for the increased popularity of online gaming and gambling.

But it’s not the only reason – and it might not even be the most important one.

Instead, cellular and mobile technology advancements are seen as the most significant boost to the growing industry.

Consider these staggering statistics from the recent Online Gambling Global Market Report:

  • Globally, mobile users account for about 80 per cent of traffic in the online gambling industry;
  • The share of users preferring smartphones to gamble online grew by 117 per cent between 2012 and 2018, according to a Rub90 study.
  • Eighteen per cent of respondents in a recent report said they gambled online at least once in 2019.
  • According to Cisco’s annual report, globally, the number of internet users is expected to grow from 3.9 billion in 2018 to 5.3 billion by 2023. That’s a CAGR of 6 per cent.
  • ACCORDING TO THE SAME CISCO REPORT, smartphone CAGR growth is expected to grow at a 7 per cent clip.

What does all that mean? Online gaming is here to stay – and Big Tech wants to be at the front of that growth.

Data service sales surpass gaming revenue for the first time.

Ever come away from an online gambling site wowed by the graphics?

You can thank Big Tech for that, too.

But you wouldn’t have that user experience without data centre servers that can handle the massive surge in demand for laptops and cloud-powered products that need graphic processors, according to T_HQ.

Nvidia, for example, is one of the largest semiconductor manufacturers in the world. You might not know them by name, but gamers are likely aware of their work, as the hardware giant is most known for the realistic graphics you see in games.

However, with the surge of popularity in online games, the graphics processing unit maker is starting to pivot away from the video game market. Instead, Nvidia is turning to sell components to data centre owners.

And the move has paid off big time for Nvidia. According to T_HQ, Nvidia recently saw its data service sales surpass gaming revenue for the first time in the second fiscal quarter of 2020. That, in turn, has led the company to dive deeper into more software-based business solutions.

What does this mean for the future of online gaming and gambling?

To say the global pandemic is the primary reason why Big Tech is increasingly delving into the gaming industry isn’t accurate – the titans of the industry were looking to expand their global reach long before that.

But it indeed served to fuel the gaming industry’s fire. Combined with the rapid increase in mobile use and the ever-increasing advancements in technology means Big Tech will continue to have its hands in the gaming industry. And that, in turn, will have a snowball effect because an overall improved user experience means more people will turn to online gaming and gambling.

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