The global video game market is poised for modest annual growth this year, reflecting a slowdown in console sales, according to a recent report by market research firm Newzoo.

In a blog post released Tuesday, Newzoo projected a 2.1% year-over-year growth for the gaming industry, reaching an estimated $187.7 billion. This is a slight decrease from the firm’s January forecast of a 2.8% growth, which would have seen revenues hit $189.3 billion.

The U.S. and China are expected to contribute nearly half of all global consumer spending on games in 2024, with the U.S. generating $47 billion and China $45 billion. Although this growth represents an improvement from last year’s 0.6%, it falls short of the rapid expansion seen during the Covid-19 pandemic.

Newzoo’s principal games market analyst, Michiel Buijsman, noted that despite the sluggish growth anticipated for 2024, the industry is expected to rebound significantly in 2025. He highlighted that console game revenues are projected to decline by 1% this year. Sony recently reported a drop in PlayStation 5 sales, from 3.3 million units in the same quarter last year to 2.4 million this year.

Buijsman predicts that the gaming sector will experience a resurgence in 2025, driven by anticipated major releases such as the next iteration of Nintendo’s Switch console and the highly anticipated Grand Theft Auto VI. Nintendo President Shuntaro Furukawa has indicated that the new Switch console could be announced in the fiscal year ending March 2025. Similarly, Take-Two’s Rockstar Games is set to release Grand Theft Auto VI in fall 2025.

These upcoming releases are expected to rejuvenate the industry, which has struggled to maintain its pandemic-era growth rates. Between 2020 and 2021, the gaming industry saw explosive growth as people spent more time indoors due to lockdowns. However, recent challenges include reduced consumer spending, a shift towards outdoor activities, and higher interest rates.

Additionally, the industry has faced significant layoffs, with major studios including Microsoft, Sony, Unity, Twitch, Playtika, and Discord cutting thousands of jobs.

Buijsman emphasized that controlling costs in a crowded and increasingly consolidated market will be a key challenge for game studios this year. He also pointed to emerging issues such as competition between free-to-play and premium games and the integration of generative artificial intelligence in game development, marketing, and operations.

(Adapted from NewsBreak.com)

Categories: Creativity, Economy & Finance, Strategy, Sustainability, Uncategorized