Strategy, quick thinking, precision… All factors that translate into success trends in skill gaming. Since Georgia’s legalization of coin-operated amusement machines (COAMs) in 2013, the genre has become a favorite of consumers in the state, and gamers worldwide seem to agree.
According to a report from Fortune Business Insights, “The global skill gaming market size was valued at USD 30.99 in 2022 and is projected to grow from USD 35.61 billion in 2023 to USD 85.34 billion by 2030, exhibiting a CAGR [compound annual growth rate] of 13.3% during the forecast period.”
With such impressive growth projections, savvy corporate entities with an eye on emerging skill gaming trends are likely interested in early adoption but may feel hesitant due to skill gaming’s controversial stance with many state governments and community members.
What Is Skill Gaming?
Unlike traditional gambling or games of chance where winning relies exclusively on random events, skill games reward players for their abilities in games that, in some cases, superficially resemble slot machines or video poker but operate under a fundamentally different premise.
Depending on the specific gaming terminal in play, examples of skills might include:
- Puzzle-based games, in which players must solve a puzzle or complete a task within a time or move limit
- Quiz and trivia games offering prizes for correctly answering questions
- Arcade-style shooters or match-three games, where success requires fast reflexes and strategy
Compare that to slot machines, which skill games are often conflated with. With true gambling devices, a player only interacts with the “game” by pushing a button to activate the random number generator that determines who wins and who loses.
Despite skill gaming’s growing popularity and its clear distinction that ability, not chance, dictates the outcome, skeptics continue to question how it’s any different from gambling, given that it requires cash to compete, with the potential for winners to walk away with prizes.
While that debate rages on, skill gaming continues to carve out its niche among players who want a challenge they can control and are willing to pay for it.
Driving Forces Behind the Meteoric Growth of Skill Gaming
Given skill gaming’s 15% growth between 2022 and 2023, one might wonder what the catalyst is. Like most trends, it’s a combination of many factors synthesizing:
Technological Advancements
Improvements in digital technology have made interacting with skill gaming machines more appealing in three key ways:
- Advancements in graphical capabilities and more accessible user interfaces have made machines more engaging and interactive, offering a gaming experience that rivals traditional video and mobile games.
- Connectivity improvements allow for networked competitions and leaderboards, making skill games a more communal activity.
- Clerkless solutions, like the Titan Redemption System, have made the process of reloading funds and redeeming winnings completely frictionless.
Changes in Gaming Demographics
Gaming has seen significant demographic shifts that make skill machines more appealing to a much wider audience.
Between 2006 and 2023, the gender distribution of gamers changed from 62% male and 38% female to 53% male and 46% female. Similarly, the average gamer’s age has only increased as people who played when they were young continue to do so as they get older. In 2022, 36% of gamers were 18-34, compared to 24% of those under 18.
Skill gaming appeals to adult gamers because it’s an activity they enjoy in their leisure time. Thus, the opportunity to play while running errands at their favorite gas stations and grocery stores is highly appealing.
Mobile-Based Skill Gaming
The monetization models that skill gaming machines use are familiar to anyone who plays mobile games, around 49% of all US adults. Familiarity cultivates comfort, so even hesitant patrons are more likely to give the terminals a try when they recognize the games’ interface for making direct wagers and purchasing in-game advantages.
Such models benefit both the GA COAM license holder and the players.
Corporations have an opportunity to generate passive revenue through both the terminals and impulse purchases of refreshments during long gaming sessions.
At the same time, patrons enjoy honing their skills to win rewards and best the competition, as it mirrors other mobile games, creating an economic incentive that naturally encourages repeated engagement and investment.
Cultural Interest in Competitive Gaming
As competitive gaming gains legitimacy and popularity, the appetite for skill-based competition in physical venues has grown.
The esports market, in particular, is growing steadily, with an estimated CAGR of 7.10% from 2024-2028, reflecting a growth in revenue from $4.3 billion to $5.7 billion. Of that, esports betting holds the largest market segment and is predicted to bring in $2.5 billion in 2024.
Skill gaming machines, with their ability to offer real-world competitive gaming in the places they already shop, satisfy the consumer’s need for low-barrier access and encourage them to visit these venues more frequently.
The Future of Skill Gaming
In the last several years, the United States has already seen regulations around skill gaming machines undergo review, particularly after sports betting became legal in the majority of US states in May 2018, generating $3.6 billion in local, state, and federal taxes by 2023. States legislations are now opening up to the idea of well-regulated, legal skill gaming as another means of bringing much-needed dollars to both businesses and governments.
As skill gaming becomes more widely accepted, corporations must partner with an experienced GA COAM Master License holder to reliably grow their revenue.
INAMAX is just such a partner. Our multi-state operators generate an average of $5,000 per location, 17% more than the Georgia state average, and guarantee a seamless integration process with the most robust support services in the industry.
Our retail partners have access to our leadership team’s more than 200 years of combined experience across the gaming, lottery, technology, retail convenience, and grocery industries, and we’ll leverage that expertise to transform underutilized space into highly profitable revenue streams.
We encourage corporations interested in skill gaming profits to reach out to our sales managers for more information by calling 770-449-0400 ext. 700 or emailing info@inamax.com.