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As the holiday spending season kicks off with Black Friday, the video game industry is struggling to maintain sales momentum following a surge in spending during the pandemic.
The global gaming market, which is expected to reach $75 billion by 2026, could see its first annual sales decline in at least a decade due to inflationary pressures and recession concerns.
Consumer spending on video game software is projected to decline by 4.3% in 2022, per Newzoo. In comparison, consumer spending on gaming software grew 7.6% last year and 25% in 2020.
Industry leaders have posted underwhelming earnings ahead of the holiday season, as well.
- Electronic Arts, publisher of Madden NFL and FIFA games, estimates net bookings in FY2023 to range between $7.65 billion and $7.85 billion, down from a previous projection between $7.9 billion and $8.1 billion.
- Take-Two Interactive previously projected revenue to reach $5.8 billion in FY2023, but the 2K owner now expects revenue to range between $5.4 billion and $5.5 billion.
- Activision Blizzard — publisher of the “Call of Duty” series — posted net bookings of $1.83 billion in Q3 2022, down from $1.88 billion for the same period last year.
Sony’s Game & Network Services segment posted $4.8 billion in sales but suffered a 49% drop in profit for the quarter ending Sept. 30.
These recent concerns arrive amid some blockbuster deals in gaming.
Microsoft is in the process of acquiring Activision Blizzard for $69 billion, but the deal is under scrutiny by antitrust watchdogs in the U.S., U.K., and European Union.
In January, Sony agreed to purchase video game developer Bungie for $3.6 billion.
