The State of the Multi-Billion Dollar Console Gaming Market
With over 2.7 billion gamers worldwide in 2020, the video game industry is undergoing a renaissance. Billions of dollars are pouring in as transformations occur on multiple fronts, including in mobile, PC, and console gaming markets.
For gamers in the latter category, there comes a monumental time when the cycle flips the page to the next generation of consoles. We are now at that pivotal moment, with the Xbox Series X and Sony PlayStation 5 set to launch on November 10 and 12, 2020, respectively.
How will this generation of console games fare relative to past iterations, and which target demographics will be driving future sales?
There Can Only Be One
Xbox and Nintendo have put up a respectable fight, but the history of gaming console sales point to an extended era of PlayStation dominance.
In fact, PlayStation sits quite comfortably on the top of the podium, with the PS2 alone experiencing greater sales than both the Xbox 360 and Xbox One combined.
Over time, Sony has only widened the gap between themselves and the competition. The spread in unit sales between PS3 and Xbox 360 ended 1.6 million in favor of Sony. In the following product cycle, Sony achieved only further dominance, with the difference between PS4 and Xbox One sales now sitting at 63.7 million units.
Looking ahead, unit sale estimates for the PS5 range from 120-170 million and the new console is set to outperform Xbox again—in line with past trends.
Game Console Sales Galore
Gaming revenues have gone unscathed despite a pandemic, a retraction in economic activity, and the tightening of budgets for households in 2020. This trend could well be a result of video games growing as a form of stay-home entertainment.
On an annualized basis, global video game console revenues are to hit $51 billion in 2020 and reach past $60 billion in the next two years.
An Attractive Disconnect
It’s clear there is significant buzz around the new consoles, but here’s another perspective that highlights their allure to consumers.
Video games possess an attractive disconnect in that they are an entertainment cash cow for gaming companies, yet gaming products also happen to be a huge cost saver for the consumer relative to other platforms and devices.
The average cost per hour for gaming services is much cheaper than the cost of a book and even more competitive relative to the cost of entertainment giants Netflix and Spotify.
An Evolving Landscape
Consoles have transformed to being about much more than just gaming. They now take front and center in people’s homes as a centralized hub for all things entertainment. For both the Xbox One and PS4, half of all gamers use their consoles for non-gaming activity.
Another more notable form of transformation is the identity of the gamer itself. The classic portrayal of teenage boys engaged in Super Mario after school in their parents’ basement has all but dissipated.
In addition to older male users, there’s now a significant emergence in female gamers. In the U.S., women surpass men in both the 36-50 and 51-65 age cohorts. Furthermore, age demographics show a higher usage amongst men in the 36-50 age group, relative to the 10-20 cohort.
A Bright Future
There are reasons to expect the next generation of console gaming to be the greatest yet.
PlayStation has momentum on their side, and a slew of new gamers exist today that will continue to help transform the market.
With a more digitally connected world, this new era will see gamers that play and compete with one another from all four corners of the globe. For gamers, this will be a thrilling experience—and for companies, a potentially very lucrative one.
Ranked: Gen Z’s Favorite Brands, Compared with Older Generations
Which brands win the most with Gen Z compared to older generations? From TikTok to Capri Sun, this ranking looks at Gen Z’s favorite brands.
Gen Z’s Favorite Brands, Compared with Older Generations
Generation Z’s favorite brands, in absolute terms, aren’t wildly different from preferences of other generations, with Walmart, Google, and Netflix ranking high. But when it comes to the brands that do the best with Gen Z compared to their elders, the list shakes up dramatically.
This ranking uses consumer preference data from Morning Consult to show which brands are favored considerably more by Gen Z when compared to the general public. A brand’s rank is determined by the difference in favorability between Gen Z’s survey responses and the average of all U.S. adult respondents.
Note: Gen Z is the generation born between 1997-2012. Favorability in this ranking is measured using the share of a generation who said they have a “very” or “somewhat” favorable opinion of said brand.
Brands Preferred by Gen Z
Compared to Millennials, Gen X, and Boomers, who may not care as much for these 20 brands, Gen Z—currently between 9-25 years old—loves them. Let’s dive in:
|Rank||Brand||Favorability Difference||U.S. Adult Favorability||Gen Z Favorability|
Note: Differences may not add up exactly due to rounding.
Unsurprisingly, TikTok takes the top spot. The app that is frequently used to poke fun at older generations and that in many ways is a reflection of Gen Z culture, is 30 points more favorable with the young generation than others.
Members of Gen Z are the first true “digital natives”—meaning they were raised in the age of digital technology. As a result, many of their favorite brands are either some kind of social media platform and/or digital service, like Apple Pay, Snapchat, or Spotify. In fact, eight of Gen Z’s top 10 favorites on the above list are digital brands.
Another distinguishing feature of consumers in this generation is that they’re more likely to care about brand ethics and sustainable consumption than other generations.
However, one brand among their top 20 that defies that sentiment is the Chinese clothing company, Shein. This fast fashion company’s model promotes a culture of mass clothing hauls and thus, clothing waste—making it far from environmentally conscious. Shein has also come under fire recently for violating labor laws in its Chinese production facilities. And yet 44% of Gen Zs have a good impression of the brand, and it particularly does well with Gen Z women.
Interestingly, members of Gen Z in the U.S. are also the first cohort to have strong awareness of Chinese brands more generally.
Gen Z vs. Millennials
Two generations that are often lumped together, Gen Z and Millennials have some considerable differences when it comes to their favorite brands. Here’s a brief look at some of the brands that do better with Gen Z compared to Millennials specifically, using favorability difference:
- TikTok: 14.2
- Crocs: 13.4
- Pixar: 8.1
- Morphe: 6.1
Compared to their generational neighbors, one interesting standout is Crocs—the utilitarian, but highly-customizable foam clogs—which almost 60% of Gen Zs see as favorable compared to only 46% of Millennials.
Gen Z’s Favorite Brands Overall
While Gen Z differentiates itself from the older generations in many ways, a lot of the overall favorites still align with everyone else’s.
Removing the favorability difference score reveals that many of the most popular brands overall still win out, such as Netflix, Google, and Amazon.
Gen Z Trends
Overall, the report found that it’s hard for brands to win with Gen Z. Across all brands that were scored, 33% of the general American public rated them as favorable, but for Gen Z respondents the number dropped to 27%.
In general, Gen Z tends to value conscious consumption and subsequently, brands that can meet those expectations. Digital services and products also do well with this generation that has never known a world without internet.
As more and more Gen Zers enter the labor market and grow their consumer power, they will be an important generation to watch.
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