The video game industry growth has slowed down.
US consumer spending on video game products has fallen by $1.78 billion in Q2, according to market research firm NPD. Overall, spending in video gaming in the US totaled $12.35 billion in the recent quarter, down 13 percent year over year. The findings follow both Microsoft and Sony reporting revenue declines in gaming as the pandemic growth slows.
Sony warned of a weaker PlayStation business earlier this week as it saw game software sales plummet 26 percent year over year. Sony blamed the slump on a lack of big PlayStation titles this year compared to 2021 and less time spent playing games in general. Microsoft’s Xbox hardware revenue dipped 11 percent year over year in its recent quarter alongside a 6 percent drop in Xbox content and services revenue and a 7 percent decline in overall gaming revenue.
Nintendo is due to report its fiscal first-quarter earnings on Wednesday, but the company forecast earlier this year that it expects to sell 21 million Switch consoles for its fiscal year that ended in March, down from 23.1 million the previous year.
While overall spending on gaming has clearly declined across the industry in Q2, subscription content “was the only segment to post positive gains,” according to NPD. That growth is despite Sony launching its revamped PlayStation Plus subscriptions at the end of the quarter.
Hardware unit sales were led by Nintendo Switch in the second quarter, according to NPD, with the PS5 generating the highest dollar sales. Despite the declines in spending amid high rates of inflation and following a big period of growth “consumer spending continues to trend above pre-pandemic levels,” says Mat Piscatella, games industry analyst at NPD. “However, unpredictable and quickly changing conditions may continue to impact the market in unexpected ways in the coming quarters.”