The Video Game Market Expects Slower Growth in 2024

The global video game market is expected to see slow sales growth this year due to weaker sales of gaming consoles, and according to new estimates from market research firm Newzoo, this growth could be only 2.1 percent, to an estimated 187.7 billion dollars.

Previous forecasts in January indicated a slightly higher growth for the video game industry, namely 2.8 percent, to 189.3 billion dollars. Although this is an increase compared to last year’s growth rate of 0.6 percent, the video game industry is no longer experiencing the boom it had during the pandemic days.

It is expected that nearly half of total spending on video games in 2024 will be realized in the US and China, amounting to 47 billion and 45 billion dollars, respectively, reported Newzoo.

New Nintendo Switch and GTA 6 – Light at the End of the Tunnel

Forecasts indicate that revenue from games on gaming consoles this year will be one percent lower than the previous year, reported Newzoo, reminding that Sony last week announced it sold 2.4 million units of its PlayStation 5 gaming console in the first fiscal quarter, a decline from 3.3 million in the same period last year.

However, in 2025, the console market is expected to ‘return with a big bang’, believes Newzoo’s chief market analyst Michiel Buijsman.

Major market news, such as the launch of the successor to Nintendo’s leading Switch console and a new game in the extremely popular franchise Grand Theft Auto, are expected to boost the industry’s prospects. In May, Nintendo President Shuntaro Furukawa stated that the company plans to announce its next Switch console in the fiscal year ending in March 2025.

Meanwhile, Take-Two’s Rockstar Games has committed to presenting its long-awaited game Grand Theft Auto VI in the fall of 2025. Analysts say these major market news will breathe new life into the gaming industry, which is struggling to achieve the growth it recorded a few years ago.

The Great Reset of the Gaming Industry

The video game industry experienced tremendous growth in 2020 and 2021, as people spent more time indoors due to restrictions during the coronavirus pandemic. However, recently, the industry has faced numerous challenges, including lower consumption, changing consumer habits, and a shift from indoor activities to outdoor activities, negatively impacted by higher interest rates.

Starting in 2023 and continuing into 2024, the video game industry has also seen mass layoffs worldwide, with major video game producers laying off thousands of employees. Microsoft, for example, laid off 1,900 employees in its gaming division in January, just three months after completing the acquisition of video game maker Activision Blizzard. A month later, Sony announced it was laying off 900 of its workers from the PlayStation division.

Game software maker Unity, Amazon’s streaming service Twitch, mobile game publisher Playtika, and social platform Discord have also announced a series of layoffs. Buijsman notes that a key challenge for video game producers this year will be ‘controlling costs in an overcrowded, increasingly consolidated market.’