The video game industry saw tremendous growth during the pandemic, with the launch of new game systems and an audience that was eager to escape the boredom of being trapped at home and seeking an interactive way to socialize with friends.
But inflation could be poised to do what a pandemic couldn’t: cause the video game industry to see a decline for the first time in at least seven years.
A forecast from Ampere Analysis predicts the global games content and services market will see a decline of 1.2% this year to $188 billion. That’s a mild decline, of course, but it follows several solid years of growth. The market today stands at nearly double where it was in 2015, jumping from $95 billion in 2015 to $191 billion last year.
The growth of the video game industry over the past two years has created a wider user base, which leaves it more susceptible to economic pressures (versus when it was more centered around core fans, who typically found money, even in tight times, to fuel their hobby).
“As we progress through a period of heavy inflation, with an increasing cost-of-living squeeze, and a higher potential for a recession, it is inevitable that the games market will be negatively impacted in certain areas,” wrote Ampere. “Indeed, the fact that the games sector is now as broad as it suggests that there are likely to be more cases where a cost-of-living squeeze will impact consumption compared to 2008 and 2009 when the last major global recession took hold.”
Beyond inflation, the return to a more normal lifestyle is impacting gaming somewhat. As people are able to get back to their lives, some are playing less, both on consoles and PCs as well as mobile devices. (And supply-chain issues continue to plague the console/PC space, as finding a PlayStation 5 or updated video card is challenging still.)
The dip in the gaming market isn’t expected to be an extended one, though. Ampere predicts the global market will rise to $195 billion in 2023.
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