Gaming Revenue Drops As Gamers Put in Fewer Hours

A recent report from research firm Newzoo suggests that the growth of revenue in both PC and console gaming markets is anticipated to remain below pre-pandemic levels until 2026. The projected growth rate of 2.7% between the end of 2023 and 2026 contrasts sharply with the 7.2% growth experienced from 2015 to 2021, according to the findings.


Gaming Revenue Drops As Gamers Put in Fewer Hours

One notable factor contributing to this slowdown is a decline in average quarterly playtime among gamers, which fell by 26% from 2021 to 2023. This trend is expected to persist in the current year, particularly due to the release of fewer new gaming titles, resulting in a roughly 10% drop in playtime observed in January.

The absence of major franchise titles, such as God of War and Marvel's Spider-Man, anticipated by Sony Group, further compounds the industry's challenges. Sony's downward revision of full-year sales forecasts for PlayStation 5 consoles, owing to weaker-than-expected holiday season sales, also underscores this subdued outlook.

Additionally, industry giants like Sony, Tencent Holdings' Riot Games, and Electronic Arts have implemented workforce reductions and downsized operations. 

Capturing a Significant Portion of Player Engagement

Consolidation within the gaming sector is evident, with a diminishing number of publishers capturing a significant portion of player engagement. For instance, between 28 and 34 publishers commanded 80% of monthly active users each month in 2023, a decline from previous years.

However, amid these challenges, certain titles such as Fortnite, Roblox, League of Legends, Minecraft, and Grand Theft Auto V have maintained substantial playtime shares. Platforms like Fortnite and Roblox have thrived due to their games-as-a-platform model, enabling continuous content updates and fostering player engagement.

Despite these headwinds, the gaming industry remains dynamic, with ongoing shifts in player behavior and preferences shaping its trajectory in the years ahead.

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