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Game Changer: The Economic Ripple Effects of Online Gaming

Authors: Ashmeet Kaur and Mishka Narang
Published on: March 31, 2024

In today’s digitally driven landscape, online gaming has emerged as a powerhouse, transcending mere entertainment to become a formidable economic force.This phenomenon, aptly dubbed “Game Changer,” is reshaping industries, economies, and social landscapes worldwide. In the current era, a single occurrence or trend within online gaming leads to reverberating consequences, economic implications and repercussions, often extending beyond its immediate context and echoing throughout interconnected systems and sectors, thereby these economic ripple effects influence various industries, markets, and socioeconomic indicators both directly and indirectly.

Online Gaming

Online game is a video game that is either partially or primarily played through the internet or any other computer network. It facilitates online interactions with other players. Online games are ubiquitous on modern gaming platforms including PCs, consoles and mobile devices, and span many genres, including first person shooters, cracking the code games, strategy games etc. Let’s delve deeper into this world of online gaming and have a closer look at various aspects of the same.

From humble MUDs to global eSports, online gaming’s journey mirrors the tech revolution

The history of online gaming parallels the gradual technological upsurge in computers and computer networking.In the 1970s and 1980s, early multiplayer games like “MUDs” laid the groundwork. The 1990s introduced online multiplayer gaming with titles like “Doom” and “Quake.” By the late 1990s and early 2000s, platforms like Battle.net and Xbox Live emerged. The 2000s saw the rise of MMORPGs like “World of Warcraft.” E-sports and mobile gaming gained prominence in recent years, fostering a global gaming community. This evolution has led to the rise of game development companies like Juego Studios and Ubisoft, unfurling numerous immersive virtual experiences for users to have fun with worldwide.

The Ever-Evolving Structure of the Video Games Industry | Source: https://www.conceptventures.vc

Online gaming poised for revolutionary growth

The gaming industry is undergoing revolutionary transformations, reflecting evolving player preferences and promising trends poised to reshape the landscape. Identifying these trends is crucial for developers, players, and industry professionals to stay ahead and seize lucrative business opportunities. Technological advancements, expanded internet connectivity, enriched player experiences, and a growing global gaming community are driving industry growth. Emerging technologies are enhancing engagement. The industry’s diversity and accessibility ensure sustained growth, promising a dynamic future for gaming.

Indian gaming unicorns shine on global stage

The Indian gaming ecosystem has birthed unicorns that not only validate the industry’s viability but also attract international recognition. The gaming industry has also led several exemplary unicorns such as Tencent Holdings, Dream Sports, MPL etc These unicorns have not only become a household name but have also made their presence felt on a global stage by the expansion of their network.

Learn more about this here: Onlinegame. (2004, October 8). Wikipedia. https://en.wikipedia.org/wiki/Online_game

Online Gaming: A Double-Edged Sword of Impact

Positive Impacts

  • Opportunities of Career Growth: 

The online gaming industry provides numerous job opportunities, like game creation and design, customer assistance, marketing leading to job growth and career chances in a variety of industries.

  • Increase in Country’s Income:

Online gaming generates significant revenue from sales of game, in-game purchases, subscriptions, and advertising, that leads to Economic Growth.

  • Investment Options: 

The growing online gaming sector attracts investment in infrastructure, technology, and talent, which drives innovation and promotes the expansion of startups, studios, and game-related enterprises.

  • Stress Reduction and Skill Development:

Individuals can use online gaming to relieve stress, relax, and improve skills  like problem-solving, awareness, and strategic thinking.

Negative Impacts

  • Physical Health Risks:

Health issues like obesity, musculoskeletal problems, and eye strain due to prolonged gaming. Poor posture, lack of exercise, and inadequate sleep patterns, increasing the risk of chronic diseases.

  • Gaming Addiction and Negative Impact on Education: 

Excessive online gaming can lead to addiction, adversely affecting mental health, social relationships. It can interfere with academic performance and learning outcomes, as excessive time spent gaming detracts from study time and concentration.

  • Financial Consequences:

In-game purchases, loot boxes, and subscription fees can lead to financial strain. Compulsive spending on virtual items or gambling-like mechanics can result in debt, financial instability.

  • Social Isolation: 

Excessive gaming leads to prioritising virtual interactions over real-world relationships. It can lead to feelings of loneliness, alienation, and problems in forming meaningful connections.

Learn more about this study here: The Rise, Impact, and Challenges of Online Gaming in India. (2023, August 9). Mithi Lassi. https://mithilassiblogs.co.in/the-rise-impact-and-challenges-of-online-gaming-in-india

The Rise of Women Gamers and Tech Evolution Spark Economic Ripples in Gaming Industry

Women in Games : A catalyst for change

We hail from a society that comprises a lost generation of women who play games growing up but for myriad reasons never solidify their mere imaginations to build a career in the same.

However,in contrast to such women, the others who fail to be victimised at the hands of  a patriarchal society stand as one of the prime reasons for the growth of online gaming industry.

Cause of Ripple Effect: Women are slowly but steadily carving a niche for themselves in the gaming industry. Today women are not afraid to identify themselves as gamers. Covid-19 pandemic has also helped initiate the rise of women gamers and provide opportunities for women to ace their skills and even participate in different gaming championships and compete with other like-minded people. The time is not far behind when women would give men a run for their money in the game industry.

Recent surveys highlight significant growth in the online gaming industry.

  1. According to Deloitte, the industry is set to reach 2.8 billion with a 40% CAGR.
  2. In India, 18% of gamers are women, expected to increase as the younger generation embraces gaming.
  3. India already boasts 250 million mobile gamers, projected to hit 368 million by 2025, with women playing a substantial role. Globally, 40-50% of gamers are female.


Source: Newzoo


With each undeniable effort, women are not only reshaping the gaming landscape but also paving the way for future generations.

Layoffs by Game Developing Companies (explained through Epic Games layoffs that took place in 2023)

Epic game layoffs refer to the company reducing its workforce by letting go of the employees. When Epic Games,a prominent player in the gaming industry announces layoffs it triggers a chain of reactions throughout the gaming ecosystem.

Cause of Ripple Effect: While on one hand, there is a surge in the potential cost savings of the company, on the other hand, the repercussions extend beyond Epic Games’ financials

  1. For developers:For developers, layoffs signify an uncertain future, disrupting careers and financial security. The influx of skilled professionals into the job market intensifies competition, potentially stagnating or reducing wages.
  2. For gamers: Gamers experience setbacks as layoffs disrupt projects, leading to delays and dampening enthusiasm for new releases.
  3. For the economy as a whole:Economically, job losses diminish consumer purchasing power, exerting negative influence on retail, entertainment, and hospitality sectors. Decreased tax revenue limits government accumulated funds for infrastructure and public services, exacerbating economic challenges.

In 2023, Epic Games’ layoffs affected 16% of its workforce, totaling around 830 employees, with additional departures from divestitures. Approximately 1600 employees, as well as numerous gamers and developers, were impacted.

To address these challenges and to further mitigate the negative effects of layoffs, governments can implement training programs and webinars to upskill affected workers, ensuring they remain competitive in the evolving industry.

Evolution of Technology

Technological advancements from evolution of software development to emergence of cloud gaming, AR and VR, Social connectivity, E-sports and streaming to enhanced graphics and realism and changes in system design with accessibility across various platforms has affirmatively affected the online gaming landscape.

Cause of Ripple Effect: Developments in the field of technology have a profound economic ripple effect. The recent technology is immensely fueled with improved graphics, highly engrossing VR experiences and faster processing speeds to make it more immersive for the players in  the market. This creates opportunities for job creation in various sectors.

In 2021, the global video game market surpassed $175 billion, with a significant portion attributed to online and digital gaming. Mobile gaming experienced a surge of over 50%, surpassing other platforms, driven by technological advancements.

Looking ahead, the online gaming industry is poised for significant advancements that aim to redefine the gaming experience, offering players accessibility, engagement, dynamism, and personalization.

Global Shutdown

A global shutdown typically refers to widespread closures or disruptions that are usually implemented by the government on a global scale. It affects the world on various parameters and across various fields including economic, social, technological, medical etc.

Cause of Ripple Effect: The global COVID-19 pandemic induced a nuanced economic ripple effect in the online gaming industry. Heightened self-isolation drove people to seek entertainment avenues, leading to increased player numbers and gameplay sessions. Inability to meet demand surges and logistical challenges posed long-term obstacles for the industry’s sustainability. The survey reports highlight :

  1. In 2020, the global video gaming market value reached approximately $155.89 billion, with a 39% increase in gaming time during the COVID-19 pandemic.
  2. Research indicates 16% of EU gamers found gaming beneficial for mental health.
  3. Total gaming video content viewers surpassed 1.2 billion in 2020.


Ongoing trends suggest sustained demand for online gaming. Developers will adapt to challenges, positively shaping industry dynamics over time.

Learn more about this study here: Navigating the future of online gaming in India: A roadmap for success. Godkhindi, K. (2023, April 11). Times Of India Blog. https://timesofindia.indiatimes.com/blogs/voices/navigating-the-future-of-online-gaming-in-india-a-roadmap-for-success/

Decoding the Economic Ripple Effects of Game: “League of Legends”

Background: “League of Legends,” developed by Riot Games, has established itself as one of the most popular online multiplayer games worldwide. Beyond its entertainment value, LoL has become a formidable economic force, shaping industries and markets in ways previously unimaginable.

This case study seeks to decode the economic ripple effects of LoL, shedding light on its profound impact on economic growth, various industries, markets, and socioeconomic indicators.

Findings: The multifaceted economic ripple effects of “League of Legends”:

  • Gaming industry: revenue generation and job opportunities:

“League of Legends” directly influences the gaming industry by driving revenue through game sales, in-game purchases, and esports events. It spurs innovation and competition among game developers, leading to the creation of new titles and advancements in gaming technology.

App revenue generated by League of Legends: Wild Rift worldwide from October 2020 to December 2023(in million U.S. dollars) | Source: https://www.statista.com

  • E-sports industry:

The popularity of “League of Legends” as an e-sports title has led to the growth of the e-sports industry. It attracts sponsorships, advertising, and media rights deals, creating economic opportunities for players, teams, event organizers, and streaming platforms.

  • Technology sector:

The demand for high-performance gaming hardware and software, including gaming PCs, peripherals, and graphics cards, is stimulated by games like “League of Legends.” This drives innovation and investment in the technology sector, benefiting companies involved in hardware manufacturing, semiconductor production, and software development. Number of users of “League of Legends” increases the business in the technology sector.

Number of League of Legends: Wild Rift app downloads worldwide from October 2020 to December 2023 (in millions) Source: https://mobilemarketingreads.com

  • Tourism and events:

Major e-sports events, such as the “League of Legends” World Championship, attract attendees from around the world, generating revenue for host cities and supporting local tourism industries.

  • Psychology well-being:

The impact of “League of Legends” on mental health and well-being is complex, with both positive and negative effects reported. While gaming can provide stress relief, social connection, and enjoyment, excessive gameplay and addictive behaviours can lead to negative outcomes such as gaming addiction, sleep disturbances, and impaired social functioning.

Bottom Line of Case Study

“Legends of the Economy” highlights the multifaceted economic ripple effects of League of Legends, demonstrating its revolutionary impact on various sectors, marketplaces, and socioeconomic metrics. As online gaming continues to evolve, understanding and harnessing the economic potential of games like LoL will be essential for driving innovation, growth, and prosperity in the digital age.

Learn more about this study here: https://mobilemarketingreads.com/league-of-legends-revenue-and-user-stats/

Future Outlook: Economic Ripple Effects Set to Transform Industries

The future outlook for the economic ripple effects of online gaming is multifaceted and dynamic.

  • Technological innovations like virtual reality and cloud gaming have the potential to completely change the gaming experience, drawing in new audiences and broadening the business.
  • The already rapidly expanding field of esports is predicted to keep growing, providing players, sponsors, and investors with enormous financial prospects.
  • It is projected that the incorporation of gaming into a number of industries, such as entertainment, healthcare, and education, would spur additional development and innovation.

Regulatory landscapes may evolve to accommodate these changes, impacting market dynamics and investment strategies. Additionally, the global reach of online gaming is set to broaden. However, challenges such as cybersecurity threats, regulatory scrutiny, and market saturation could temper growth and require strategic adaptation.

Overall, the future of online gaming promises continued expansion and transformation, with profound implications for the global economy.

Online Gaming: Shaping Economies, Transforming Industries

To sum up, the financial consequences of internet gaming are a disruptive force across multiple industries. An introduction to the gaming industry was followed by a discussion of the widespread impact of online gaming on various industries, economies, and societies and detailed analysis of factors responsible for economic ripple effects. Case study of game “LEAGUE OF LEGENDS” demonstrated practical applications with both favourable and unfavourable outcomes. Future predictions for the sector include sustained expansion driven by technical advancements and flexible approaches to deal with obstacles. Thus, online gaming stands as a game-changer, reshaping economic landscapes and shaping the future of entertainment.



  1. Wikipedia: Online game. https://en.wikipedia.org/wiki/Online_game
  2. Times Of India (2023). Navigating the future of online gaming in India: A roadmap for success. https://timesofindia.indiatimes.com/blogs/voices/navigating-the-future-of-online-gaming-in-india-a-roadmap-for-success/
  3. Mithi Lassi (2023). The Rise, Impact, and Challenges of Online Gaming in India. https://mithilassiblogs.co.in/the-rise-impact-and-challenges-of-online-gaming-in-india/
  4. Ripple Effect: How Women-in-Games Initiatives Make a Difference. https://youtu.be/tkbVOUGSxjs?si=mHnqCWEVC_NsV2wr