U.S. Video Game Market to Decline in 2024, But Circana Forecasts 2025 Rebound

/EIN News/ -- Chicago, Aug. 21, 2024 (GLOBE NEWSWIRE) -- The U.S. video game industry is expected to rebound in 2025 following a difficult 2024. Circana™’s Future of™ Video Games projects growth for the U.S. video game market in 2025, driven in part by the expected launches of a new hardware platform from Nintendo along with the highly anticipated release of Grand Theft Auto VI, among other factors.

After decades of nearly uninterrupted growth in player count and engagement, the video game market matured during 2020 and 2021. This shift was driven by consumers who turned to gaming for not only entertainment, but also to stay connected with family and friends.

Today, the number of people playing video games, and the time spent gaming, continue to trail the all-time highs set in 2021, while higher prices in everyday spending categories and the return to experiential spending have provided challenges in making more time and dollars available for gaming.

“The transition to the new normal in the video game market has not been painless,” said Mat Piscatella, video games industry advisor at Circana. “However, the long-term outlook remains optimistic, with 2025 in particular carrying significant growth potential.”

Here is a snapshot of how video game hardware, software, and accessories sales are forecasted to fare through the remainder of the year:

In 2024, video game hardware revenue is expected to decline on account of decreases in both average prices and units sold. However, many players have looked to more easily accessible platforms such as PCs and mobile devices, which has helped offset some of the console-related declines. An emerging and exciting area of video game hardware to watch closely is PC portable gaming systems like the Steam Deck.

Following the trend of physical media diminishing, publishers will continue to increase focus on the digital delivery of content and services. While Nintendo is expected to support physical software for its expected new console in 2025, the future of physical software on the next Sony and Microsoft platforms is far less certain.

While some new video games, such as Helldivers II, Palworld, and MONOPOLY GO!, have broken through to achieve hit status in 2024, many new games entering the market are finding it difficult to compete against the long-established and mostly free-to-play ‘forever’ games such as Minecraft, Fortnite, Roblox, Grand Theft Auto V and Call of Duty, among others.

In accessories, gamepads, headsets and headphones will continue to drive sales in 2024, with growth in average prices helping to offset a decline in units sold. Gamepads will see a boost from a variety of price points, colors, and themes while consumers refresh headsets purchased three or four years ago. There has also been some recent success with the new remote-play device segment which includes PlayStation Portal, which is providing a small, but encouraging, lift to the accessories market.

“This will continue to be a difficult year for video game manufacturers and publishers, as an overall spending decline, albeit in the low single-digits, is expected,” said Piscatella. “However, the anticipated first half debut of Nintendo’s next generation hardware platform should provide a significant boost, as should the launch of Grand Theft Auto VI, which may just become the biggest entertainment launch in U.S. history.”

About Circana
Circana is a leading advisor on the complexity of consumer behavior. Through superior technology, advanced analytics, cross-industry data, and deep expertise, we provide clarity that helps almost 7,000 of the world’s leading brands and retailers take action and unlock business growth. We understand more about the complete consumer, the complete store, and the complete wallet so our clients can go beyond the data to apply insights, ignite innovation, meet consumer demand, and outpace the competition. Learn more at circana.com.

Shelley Hughes
                    Circana
                    +1 312-731-1782
                    Shelley.Hughes@circana.com