[Industry news] Video gaming is the fastest-growing e-commerce vertical and is set to more than triple in Europe by 2035

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Europeans will more than triple what they spend on video gaming by 2035, going from USD 27.9 billion to USD 89.9 billion. That is a compound annual growth rate of 13.9%, the fastest of any e-commerce vertical in the region and well ahead of the next two, Software-as-a-Service (8.8%) and Social Media (8.7%). Video gaming led the ranking worldwide as well, at 13.3% a year, from USD 206.1 billion to USD 633.8 billion over the same period.

The findings come from a new analysis by EBANX, a technology company connecting global businesses to emerging markets through payments, based on data from World Data Lab (WDL). The numbers land in the week of Gamescom, the world’s largest event for computer and video games, which opens in Cologne, Germany, on 26 August.

The country contributing most to European growth is Russia, which accounts for 14.1% of all the new spending on video gaming projected for the region through 2035, despite a CAGR of 11.9%. The next five markets by contribution are Spain (12.9% of the total, at a CAGR of 18.5%), Italy (12.4%, at 19.7%), Germany (8.9%, at 12.8%), the United Kingdom (7.7%, at 9.5%) and France (6.9%, at 12.5%).

In Europe, the expansion in spending on video gaming is driven by older consumers at the top of the income distribution. EBANX’s analysis of WDL data shows that adults aged 45 and over account for 55.6% of the projected increase, and that 62.9% of it belongs to the Rich and Upper Middle Class, those spending more than USD 90 a day. The United States, whose CAGR sits at 12.6%, shows a similar picture, with the same two groups at 54.2% and 90.6%, respectively.

“This concentration of growth in the wealthiest income bracket shows the American and European markets are expanding through consumers the industry has held on to for a long time. Renewal is a different job, and it is happening elsewhere, in emerging markets,” said Estelita Hass, Head of Market Intelligence at EBANX. WDL projects that more than 1 billion consumers in those countries will join the consumer class by 2036, against 28 million in developed economies.

That expansion of purchasing power reaches video gaming directly: emerging economies are 42 of the 50 fastest-growing markets. Among countries whose annual spend in the category will exceed USD 500 million by 2035, they take seven of the top ten positions by CAGR: Kenya (25.6%), Turkey (21.3%), Ukraine (20.6%), Ethiopia (20.3%), Pakistan (20.3%), Brazil (19.5%), and Saudi Arabia (18.4%). The only developed economies on the list are Taiwan (24.7%), Italy (19.7%) and Spain (18.5%).

“Rates like these come from arrival, from people making a first purchase, opening a first wallet, paying for something they could not afford,” explained Hass. “That is the moment a relationship begins and loyalty starts to be built, which is why meeting these players on their own terms, with the habits they already have, matters well beyond the first transaction.”

One of those habits is how a player pays, and EBANX’s internal data shows how much it weighs. In Brazil, where 60 million adults do not have a credit card, the instant payment system Pix has become the method local players use most to buy from one of the largest video gaming companies in the world. Another major publisher raised its total revenue in the country by 12% after letting customers pay in instalments, which now account for 48% of all its transactions in the Brazilian market.

In Colombia, a global video gaming company saw revenue rise more than 25% and transaction volume 32% after adding Nequi, the most popular digital wallet there, to its checkout. According to Nequi and World Bank data analysed by EBANX, the wallet is used by 62% of adults, nearly three times the share who hold a credit card. Similar cases appear across EBANX’s operations in Africa, Southeast Asia and India.

“Low card penetration and the digitalisation of these economies through local rails and alternative payment methods have driven massive financial inclusion over the past decade, bringing a whole young generation into digital commerce,” noted Hass. “These are the consumers behind video gaming growth in emerging markets, a profile completely different from what we see in the U.S. and Europe.”

EBANX’s analysis of WDL data shows that consumers under 45 account for 51.6% of the projected increase in video gaming spend across emerging markets. By income, the largest contribution comes from the Core and Lower Middle Classes, at 61.1%.

The weight of each factor varies by region. Africa is where the pattern shows most clearly, with 80.5% of the increase coming from players under 45 and 80.2% from consumers below the upper middle bracket. Southeast Asia sits close behind, at 62.7% and 56.8%. Latin America is at the other end of the range, at 52% and 48.1%, the profile closest to a mature market anywhere in the analysis.