Chicago, August 21, 2024 (GLOBE NEWSWIRE) — After a difficult 2024, the U.S. video game industry is expected to recover in 2025. Circana™’s Future of™ Video Games forecasts growth for the U.S. video game market in 2025, driven by, among other things, the expected launch of a new hardware platform from Nintendo and the highly anticipated release of Grand Theft Auto VI.
After decades of nearly uninterrupted growth in player numbers and engagement, the video game market matured in 2020 and 2021. This shift was driven by consumers turning to gaming not only for entertainment, but also to stay connected with family and friends.
Today, the number of people playing video games and the amount of time they spend playing games remains below the all-time highs seen in 2021. At the same time, higher prices in everyday spending categories and the return to experience-oriented spending make it difficult to allocate more time and money to gaming.
“The transition to the new normal in the video game market has not been painless,” said Mat Piscatella, video game industry consultant at Circana. “However, the long-term outlook remains optimistic, with 2025 in particular holding significant growth potential.”
Here’s a snapshot of video game hardware, software and accessories revenue forecasts for the rest of the year:
In 2024, video game hardware revenue is expected to decline due to declining average prices and units sold. However, many gamers have turned to more accessible platforms such as PCs and mobile devices, which has helped offset some of the console-related declines. One emerging and exciting area of video game hardware to watch closely is portable PC gaming systems such as the Steam Deck.
As physical media becomes less common, publishers will continue to focus more on delivering content and services digitally. While Nintendo is expected to support physical software for its new console in 2025, the future of physical software on Sony and Microsoft’s next platforms is far more uncertain.
While some new video games like Helldivers II, Palworld and MONOPOLY GO! have broken through and achieved hit status in 2024, many new games on the market are struggling to compete against the long-established and mostly forever free games like Minecraft, Fortnite, Roblox, Grand Theft Auto V and Call of Duty, to name a few.
For accessories, gamepads, headsets and headphones will continue to drive sales in 2024, with rising average prices helping to offset a decline in units sold. Gamepads will see a resurgence thanks to a variety of prices, colors and themes, while consumers will refresh headsets they bought three or four years ago. The new remote play device segment, which includes the PlayStation Portal, has also seen some recent success, giving the accessories market a small but encouraging boost.
“This will continue to be a difficult year for video game manufacturers and publishers, with spending expected to decline across the board, albeit in the low single digits,” Piscatella said. “However, the expected debut of Nintendo’s next-generation hardware platform in the first half of the year should provide a significant boost, as should the release of Grand Theft Auto VI, which may 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 domain expertise, we provide clarity that helps nearly 7,000 of the world’s leading brands and retailers take action and enable business growth. We better understand the whole consumer, the whole business and the whole wallet, so our clients can go beyond the data to apply insights, drive innovation, meet consumer demand and stay ahead of the competition. For more information, visit circana.com.
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