Technology
Online Gaming: The Rise of a Multi-Billion Dollar Industry
Online Gaming: The Rise of a Multi-Billion Dollar Industry
From tabletops to virtual reality, how we play games is changing with the times.
In just a few short decades, the world of online gaming has exploded in popularity. Estimated to reach $196 billion in revenue by 2022, it is now considered to be one of the fastest growing industries on the planet.
The infographic above explores the humble beginnings of the online gaming market and dives into the technological possibilities driving its future.
The Birth of Online Gaming
Although video game prototypes were created by scientists as early as the 1950s, the very first gaming console was not introduced to consumers until the ‘70s. Subsequently, use of online games began to proliferate in the ‘90s as a result of widespread internet adoption.
- 1990s: Online gaming rapidly gains popularity due to the increasing availability of the internet
- 2003: Digital storefront Steam launches, allowing gamers to buy and review games online
- 2004: World of Warcraft launches, the first massively multiplayer online (MMO) to eclipse more than 10 million active subscriptions
- 2007: Online gaming starts shifting to mobile
- 2009: Minecraft launches and becomes one of the best selling video games in history with 176 million copies sold
- 2009: Apple announces In-app Purchase feature for iPhone apps
- 2015: 1.5 billion gamers around the world
- 2016: Augmented reality game Pokémon Go is launched, generating the most revenue grossed by any mobile game in its first month.
- 2019: Google releases Stadia, a cloud gaming service that allows gamers to play without a console
It is clear that technological innovation plays a huge role in fueling the evolution of online gaming, but there are also several other factors at play.
The Components of Online Gaming
In the world of gaming, there is often confusion between commonly used terms such as “online gaming” and “esports”—when in fact esports is just one segment that sits within the enormous online gaming ecosystem:
- Distributors and Retailers: Platforms that distribute and sell games
- Streaming Services: Services that allow users to livestream games
- Hardware Developers: Companies that build the electronic infrastructure required to play games
- Gaming Arenas: Venues that host gaming events
- Esports: Organized, multiplayer video game competitions, typically between professional players
- Software Developers: Develop applications that allow users to do specific tasks
- Game Publishers: Companies that finance and distribute games
- Game Developers: Studios that develop games
This ecosystem creates dozens of revenue streams for the industry as a whole. For every one of these channels, the shift to mobile gaming presents significant opportunities for growth.
Mobile: The Future of Gaming
Mobile is the largest gaming platform, producing $68.5 billion in revenue in 2019—45% of the total market that also includes PC and tablet gaming.
Although still a relatively new segment of the industry, mobile gaming has developed at an astonishing rate, with 2.4 billion people playing games on mobile in 2019. Part of mobile’s breakneck growth can be attributed to an innovative and seamless user experience which relies on engaging features such as in-app purchases and loyalty rewards.
With the 5G era quickly descending upon us, these pocket-sized game consoles could transform online gaming, and make the industry even more exciting.
Towards a New Age of Entertainment
As the number of players continues to grow, it is clear that the technological possibilities of online gaming are endless. Some are already beginning to take shape:
Virtual Reality
With industry leaders such as Oculus and Valve announcing cheaper headset options, blurring the lines between fantasy and reality is becoming more accessible for mass markets, and the pace could pick up further in 2020.
Cloud Gaming
Cloud gaming takes advantage of faster, more reliable internet connections by giving gamers the ability to stream games rather than playing on a console.
Real-time Personalization
In the future, games could automatically generate game content that is customized to fit each player’s personality and playstyle, based on their player data.
As these technologies develop, they alter the way users experience games, and provide new opportunities for brands and advertisers to tap into enhanced viewer engagement.
Many industry players will thrive in this new environment, while others will fall by the wayside. Who will emerge victorious, and lead us into the future of entertainment?
Technology
Nvidia Joins the Trillion Dollar Club
America’s biggest chipmaker Nvidia has joined the trillion dollar club as advancements in AI move at lightning speed.

Nvidia Joins the Trillion Dollar Club
Chipmaker Nvidia is now worth nearly as much as Amazon.
America’s largest semiconductor company has vaulted past the $1 trillion market capitalization mark, a milestone reached by just a handful of companies including Apple, Amazon, and Microsoft. While many of these are household names, Nvidia has only recently gained widespread attention amid the AI boom.
The above graphic compares Nvidia to the seven companies that have reached the trillion dollar club.
Riding the AI Wave
Nvidia’s market cap has more than doubled in 2023 to over $1 trillion.
The company designs semiconductor chips that are made of silicon slices that contain specific patterns. Just like you flip an electrical switch by turning on a light at home, these chips have billions of switches that process complex information simultaneously.
Today, they are integral to many AI functions—from OpenAI’s ChatGPT to image generation. Here’s how Nvidia stands up against companies that have achieved the trillion dollar milestone:
Joined Club | Market Cap in trillions | Peak Market Cap in trillions |
|
---|---|---|---|
Apple | Aug 2018 | $2.78 | $2.94 |
Microsoft | Apr 2019 | $2.47 | $2.58 |
Aramco | Dec 2019 | $2.06 | $2.45 |
Alphabet | Jul 2020 | $1.58 | $1.98 |
Amazon | Apr 2020 | $1.25 | $1.88 |
Meta | Jun 2021 | $0.68 | $1.07 |
Tesla | Oct 2021 | $0.63 | $1.23 |
Nvidia | May 2023 | $1.02 | $1.02 |
Note: Market caps as of May 30th, 2023
After posting record sales, the company added $184 billion to its market value in one day. Only two other companies have exceeded this number: Amazon ($191 billion), and Apple ($191 billion).
As Nvidia’s market cap reaches new heights, many are wondering if its explosive growth will continue—or if the AI craze is merely temporary. There are cases to be made on both sides.
Bull Case Scenario
Big tech companies are racing to develop capabilities like OpenAI. These types of generative AI require vastly higher amounts of computing power, especially as they become more sophisticated.
Many tech giants, including Google and Microsoft use Nvidia chips to power their AI operations. Consider how Google plans to use generative AI in six products in the future. Each of these have over 2 billion users.
Nvidia has also launched new products days since its stratospheric rise, spanning from robotics to gaming. Leading the way is the A100, a powerful graphics processing unit (GPU) well-suited for machine learning. Additionally, it announced a new supercomputer platform that Google, Microsoft, and Meta are first in line for. Overall, 65,000 companies globally use the company’s chips for a wide range of functions.
Bear Case Scenario
While extreme investor optimism has launched Nvidia to record highs, how do some of its fundamental valuations stack up to other giants?
As the table below shows, its price to earnings (P/E) ratio is second-only to Amazon, at 214.4. This shows how much a shareholder pays compared to the earnings of a company. Here, the company’s share price is over 200 times its earnings on a per share basis.
P/E Ratio | Net Profit Margin (Annual) | |
---|---|---|
Apple | 30.2 | 25.3% |
Microsoft | 36.1 | 36.7% |
Aramco | 13.5 | 26.4% |
Alphabet | 28.2 | 21.2% |
Amazon | 294.2 | -0.5% |
Meta | 33.9 | 19.9% |
Tesla | 59.0 | 15.4% |
Nvidia | 214.4 | 16.19% |
Consider how this looks for revenue of Nvidia compared to other big tech names:
$NVDA $963 billion market cap, 38x Revenue
$MSFT $2.5 trillion market cap, 12x Revenue$TSLA $612 billion market cap, 7.8x Revenue$AAPL $2.75 trillion market cap, 7.3x Revenue$GOOG $1.6 trillion market cap, 6.1x Revenue$META $672 billion market cap, 6x Revenue pic.twitter.com/VgkKAfiydx— Martin Pelletier (@MPelletierCIO) May 29, 2023
For some, Nvidia’s valuation seems unrealistic even in spite of the prospects of AI. While Nvidia has $11 billion in projected revenue for the next quarter, it would still mean significantly higher multiples than its big tech peers. This suggests the company is overvalued at current prices.
Nvidia’s Growth: Will it Last?
This is not the first time Nvidia’s market cap has rocketed up.
During the crypto rally of 2021, its share price skyrocketed over 100% as demand for its GPUs increased. These specialist chips help mine cryptocurrency, and a jump in demand led to a shortage of chips at the time.
As cryptocurrencies lost their lustre, Nvidia’s share price sank over 46% the following year.
By comparison, AI advancements could have more transformative power. Big tech is rushing to partner with Nvidia, potentially reshaping everything from search to advertising.
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