Belgian video game industry recovers in 2023, but grows more slowly than expected

Brussels, July 16, 2024 - The Belgian market for video games and esports grew by 1.5% to EUR 821 million in 2023, according to PwC's Global Entertainment & Media Outlook. This recovery indicates that the sector is on the rise again after a 6.1% decline in 2022. Growth is expected to accelerate further in the coming years. However, a contraction is anticipated again from 2027 onwards. Moreover, the Belgian video game industry is the slowest growing in the world. Despite the presence of high-quality game development education programmes in Belgium, many talented students are moving abroad due to an unattractive investment climate. The government is launching initiatives aimed at reversing this trend and making it more appealing for top professionals to use their talent in the Belgian market.

In 2023, the total revenue of the Belgian market for video games and esports reached EUR 821 million. This figure represents a return to positive growth after a contraction in 2022. Last year, revenue increased by 1.5% compared to 2022 (EUR 809 million). In 2022, the Belgian video game industry shrank by 6.1% compared to the previous year (EUR 862 million). Although this recovery highlights the sector's resilience, the Belgian video game industry is the slowest-growing in the world. Traditional video games are performing poorly, and social and casual games are growing slower than expected. *

Traditional gaming weakens significantly: sales of physical console games to halve by 2028

In 2023, traditional games (a subsegment of video games and esports) generated EUR 295 million in Belgium, but this is expected to decline to EUR 276 million by 2028. This 6.4% decrease is mainly driven by a sharp decline in the sales of physical console games. Sales of these games are expected to nearly halve to EUR 63 million by 2028. Although other areas of traditional gaming, such as digital console and PC games, show mild to moderate growth, this is insufficient to compensate for the rapid decline in physical console games.

Accelerated growth expected in 2024, but contraction looms again in 2028

Looking ahead, the growth of the Belgian video game market is expected to accelerate to a peak of 5.1% in 2024, reaching revenue of EUR 863 million. However, growth will slow down again and even contract by 2028, by which time the market is expected to reach revenue of EUR 894 million.

Exceptional ecosystem for talent in the gaming sector

With the presence of high-quality game development education programmes such as 'Digital Arts and Entertainment' at Howest Kortrijk, Belgium has an exceptional ecosystem for talent in the gaming sector. A regrettable trend is that many talented students are moving abroad.

Dries Deryckere, Academic Director of the programme, explains: "This is partly due to the allure of leading game companies in Germany, the United Kingdom and the United States, and partly due to the challenges of the Belgian investment and tax climate. There are too few companies in Belgium that are working on projects interesting for students, which leads to a shortage of job vacancies. This shortage is the result of this investment and tax climate, causing larger game companies to prefer starting studios abroad."

Patrick Boone, Chairman of PwC Belgium, emphasises Belgium's unique position in the gaming industry: "Thanks to our excellent education programmes and the top talent available, we have everything we need to lead in the development of future games. However, it is crucial that we ensure our region becomes a fertile ground for the gaming industry and that we strengthen our position. Political initiatives such as the Flanders Game Hub, a tax shelter, and the support of Flanders Trade & Investment are of great importance in this regard. These initiatives make it more attractive for top talents to build their careers in Belgium. I am confident that these measures will enable Belgium's video game industry to grow stronger again."

Sector on the brink of an exciting future

Despite the slower growth figures, the Belgian market for video games and esports shows remarkable resilience. With a clear shift to mobile platforms, a growing esports scene and innovative advertising methods, the sector is on the brink of an exciting future.

Video games via phone apps drive limited growth in social and casual games

Social and casual games are the most popular in Belgium. In 2023, this segment generated 514 million euros in revenue. But with an annual growth rate of only 3.3% (compound annual growth rate or CAGR), this segment is growing abnormally slowly. Additionally, revenue from advertisements in these games is growing more slowly than normal. Most revenue comes from games played via apps. They accounted for 75% of the revenue in 2023. Games played via a web browser are becoming less popular as people prefer to play games on their phones. There is a clear shift in consumer preferences towards mobile platforms. Despite the slower growth in social and casual gaming, revenue in this segment is expected to increase by 17.9% by 2028, reaching 606 million euros. This form of advertising allows brands to connect with their target audience in a creative and non-intrusive way, contributing to the popularity and effectiveness of this strategy.

---

* Video games and esports: This segment comprises consumer spending on video games software and services (not hardware or devices) across both traditional and social/casual gaming, as well as revenue from advertising via video games. It also includes revenue from consumer and advertiser spend on esports. Traditional gaming comprises revenues associated with playing games on PCs and games consoles (both TV-connected and portable). This includes physical (disc-based) game sales at retail (both bricks-and-mortar and online retailers), digital game sales (including Steam, Good Old Games and Origin for PCs, and the PlayStation Store, Xbox Games Store and Nintendo eShop for consoles), and additional downloadable content (DLC) and subscription services. Online/microtransaction revenue also includes spending associated with free-to-play Massively Multiplayer Online games (MMOs), but does not include spending on social and casual browser-based games, which are included in the social/casual gaming component.

Press contact

About PwC

At PwC, our purpose is to build trust in society and solve important problems. We’re a network of firms in 151 countries with more than 364,000 people who are committed to delivering quality in assurance, advisory and tax services. Find out more and tell us what matters to you by visiting us at www.pwc.com.

PwC refers to the PwC network and/or one or more of its member firms, each of which is a separate legal entity. Please see www.pwc.com/structure for further details.

© 2024 PwC. All rights reserved.