Report: Video game revenue shrinks in 2022, snapping growth streak
More people in the world will play video games this year than ever before, but the amount of money spent on gaming will decline, according to a new report from leading research firm Newzoo.
Why it matters: After video games boomed during the first two years of the pandemic, Newzoo calls this the first drop in revenue since it began tracking the industry more than a decade ago.
- But Newzoo and other analysts predict a return to growth in the coming years.
By the numbers:
- 3.2 billion players (up from 3.1 in 2021)
- $184.4 billion in revenue (down from $192.7 billion in 2021)
- Newzoo's survey size: More than 75,000 people in 36 countries
Between the lines: The research firm says mobile gaming, which constitutes half of the global market, is the “primary driver” of the unusual revenue decline.
- The mobile drop more than offsets slight growth in PC gaming and a smaller dip in console gaming, where the pandemic has wreaked havoc with development schedules and hardware supply.
There are many suspects for the dip in mobile, including the easing of pandemic lockdowns giving people more spending options, as well as inflation pressure spooking people from spending.
- Last week, Take Two Interactive CEO Strauss Zelnick, whose company bought mobile behemoth Zynga for $12.7 billion earlier in the year, noted: “At times when consumers are feeling the pressure of higher prices for fuel and food, for example, they may be less likely to spend money on entertainment, especially when you can have the experience anyhow.“
Yes, but there are still bright spots for the games industry.
- Player numbers are soaring in Latin America, Africa and the Middle East, all mobile-centric regions where improved infrastructure is enabling more people to play games, Newzoo notes.
- And the market overall is expected to grow again soon, reaching 3.5 billion players and generating $211 billion by 2025.
The bottom line: Newzoo calls 2022 a “a corrective year for the games market following two years of lockdown-fueled growth.
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