Today, gaming is the largest category in the entertainment industry, with revenues that far exceed those of both the film and music industries. In 2022, the gaming industry is expected to be worth more than $170 billion in global revenues, five times greater than global movie box office revenues.

When we look at the numbers from the entertainment industry in 2021, the overall gaming industry (including mobile, PC, and console games) was worth 192.7 billion USD. When we compare it with other types of entertainment, we can see that are far behind the games:

• Books and e-books are worth 120 billion USD
• Filmed entertainment (home and theatrical) 99.7 billion USD and
• Recorded Music (physical, digital and others) 25.9 billion USD

Leaders in revenue within the gaming industry are mobile games, which make up over 50% of all gaming industry revenue.

Introduction to the gaming industry

Not all games are made alike. We can classify games in many different ways, like genre, business model, etc. but this is probably the best place to start.

AAA games – usually console and PC games with big budgets and created by large studios. Those games are of high polish, have long gameplay and some of them are powerful IP’s in their own right (like Lara Croft or The Last of Us, for example). Generally, hundreds of people work on one game for around two years.

Mobile and AA games – games that are made by professional studios but primarily for mobile platforms. These games are of high quality, but it takes fewer people and less time to produce them. They are specific because they are usually free to play, they make money continually in the long run and they are actively maintained for years to come, so most work is done after the game is released (we call it live ops)

Indie games – games made by independent studios or individuals. Not necessarily with business agenda, can be of various quality. Some of them can also become hits

Educational games – usually made by specialized studios and focused on children and youth. They can have more or less elements of the games. They are more regulated than other types of games.

How does music work in games?

Music and games go hand in hand. It’s impossible to imagine a game without music. But, in different games, music has different roles.

In console and PC games, music, sound, and dialogue are exceptionally important. Players who play AAA games on consoles want to feel full immersion in the experience and music is an important part of that. On the other hand, mobile games are consumed “on the go” – very often in public spaces like waiting rooms, public transport, etc. While players appreciate music, it’s often turned off not to disturb places around the player.

Indie games generally have limited budgets. While they might want to put more elaborate scores in their games, their creativity in music selection is usually limited by finances. 

This makes us ask ourselves, how much do gaming studios spend on music? 

This will depend on many factors, from studio size and location to game target platform, genre, and many other things.

In AAA games up to 20% of the game budget goes to audio. How much is that? For example, Grand Theft Auto V cost 266 million USD to make. That means that possibly up to 53.2 million USD was spent on audio. This would include an original soundtrack, licensed music, SFX, and voice-over. Keep in mind that this is an estimate, as there is no way to really find out how much the studio actually spent on the game unless they decide to openly share their financial information, which is rarely the case.

Smaller game studios and ones focused on mobile have smaller budgets for music as it’s not that crucial part of the player experience. Exceptions are music-based games and music education games. In them, music will play a significant role, and budgets, even if limited, might be more generous about purchasing music.

The current market price for composed music in games is about $1000- $2000 for a minute of original music created by a professional composer, but those prices might fluctuate significantly. 

How do gaming studios obtain music?

There are no unified guidelines or practices on how gaming studios obtain music for the games. Generally, we can group it into three distinct categories.

1. Internally – large studios have their own audio departments. They will create their own special effects sounds, theme music, and any other sounds. Most probably, they will still outsource voice-over and might license some music.
2. Externally – most smaller and mobile studios get all of their music externally. They use gaming-specialized composers, audio databases, and free resources. They also might use orchestras, musicians who specialize in particular instruments, or contract particular musicians for the type of music the studio wants. 
3. External partners can be further split into freelancers and external partners. Freelancers are individuals who create particular parts of audio for the game. External partners are usually specialized audio agencies that can produce different types of audio-related products and services for games.

Licensing music in games

There are no royalties from games: it is not considered performance and usually, games do not pay royalties to composers

Gaming studios do license existing music and some of the most epic moments in gaming come from the perfect match between already-known songs and gameplay (Grand Theft Auto and Grand Turismo are some of the well-known examples)

Successful games can help in-game music gain visibility outside of the games, as fans will look for it outside of the games as well

Looking in the future, with web3 and metaverse developments, we are entering a new era where live concerts are happening in real-time in games. We already have seen great examples of that in Avakin Life game and at Decentraland platform with their Metaverse Music Festival.