"US consumers spent almost $2 billion less on video"

Market research firm NPD writes that US spending on video gaming, which covers content, hardware, and accessories, reached $12.35 billion in the most recent quarter. That's still a lot of money, but it's down $1.78 billion, or 13 percent, compared to the same period last year.

Looking at some individual segments, content spending in Q2 reached $10.97 billion, marking another 13% decrease compared to Q2 2021. Hardware and accessories declined 1% and 11%, respectively, but it was mobile content that contributed most to the overall decline. techspot

Is this decline going to have negative effects on the big three and other larger companies? Would this lead to a shift in game development spending?🤔

@Pedro: nobody should compare to covid years. How is 2022 compared to 2019, that the important question

How does it compare to pre-COVID numbers? Being locked up inside gave many a reason to splurge in games and if I remember, the COVID years saw record profits.

The closest I got was this

According to theQ3 2019 Games Market Dynamics: U.S.* report fromThe NPD Group, overall total industry consumer spending on video gaming in the U.S. reached $9.18 billion in the third quarter of 2019 (July – Sept.), an increase of 1 percent compared to the same time period last year. NPD

EDIT: Found something more relevant. Third quarter but it gives some perspective.

True, Doom Eternal had a bigger launch than DOOM 2016 and that was because it launched in March 2020, which was during one of the original lockdowns.

just goes to show you how ridiculous 2020-2021 was

Depends where you live, the actual lockdown in most U.S didn't start until late March 2020 and not just video games but movie theaters across the states were feeling the pain. People were starting to work from home more than ever, even digital gaming saw huge sales and on PC, Steam had more sales then the physical.

Doom: Eternal was gonna have a good launch anyway so that was already a given.

I would like to see how U.S. consumers will spend in the third quarter now that the U.S. is officially in a recession (two straight quarters of negative economic growth) and dealing with high inflation. Would this recession be much worst that the one we experienced due to the shutdowns caused by the pandemic?

Pure speculation on my part, but I think the majority of gaming is done on a free-to-play basis, with the assumption people will pay for DLC and stuff. That, and COVID was really, really great for the video game industry.

When times are tight, people will keep playing video games, they just won't pay for bullshit.

Given that games like COD and other behemoths follow a free to play model based on milking their playerbase, when the udder dries up times are going to be tight.

Of course, that probably makes way too much sense to be true😉😋 Chances are that publishes will increase their prices, citing "rising cost of video game development" or other lies, while also implementing more draconian measures to control their IP.

Brace yourselves, folks; things are going to get worse before they get better.

Support indie games! Support small developers! I've got thousands of hours in games that cost <30 dollars while I can't even be bothered to finish my 60-dollar (soon to be 70!) AAA games.

I agree with the final point, it was always gonna be a hit.

But I think it got catapulted into a higher tier due to lockdown, and so many people bored out of their minds not knowing what to do. "Oh hey, a new DOOM game came out and it's doing really well and people are enjoying it, I guess I'll try it too..."

A perfect storm.

Ehh, hopefully no long term impact on the big 3. I would imagine like others have said in COVID, people were locked up. Similar to how Netflix has record subscribers, not they are on decline for 2022.

AAA industry seems to be basing its monetization model entirely on milking the whales.

An entirely unsustainable business model based entirely off spending issues of a vulnerable group.

I'll gladly support indie and AA games. But I'll twist and turn my 70 dollars many a times before I spend it on another AAA game.

Consumer spending was at an all time high in 2020-2021. Hence the inflation now.

My company experienced it's best years ever during COVID in our company history.

This is probably going to be the story across most sectors with a few exceptions like the energy sector.

imagine uk will be a similar story. my energy bills have doubled, set to go up again by another 50-100% this autumn. fuel, food all jumped massively. cost of living crisis is permanently on the news as a constant reminder of how grim things are and that its going to get worse. i'm thinking upgrade my pc or maybe get a new xbox, grab gamepass and ride out the storm

@Macutchi: Damn. That sucks.

It does make sense. Not only are people getting out and doing other things more but pretty much everything has been going up in price. People need to make sacrifices sometimes and entertainment costs are usually the first to get cutback on.

I believe the industry is in a big need of another gaming crash... the videogame market is way too bloated rn and the aim for live services and mxt is very worrissome to say the least. Cinema is in a downspiral and I believe games will be next

Why would the collapse of game companies be better for gaming?

I’ve been through the game crash in the ‘80’s and I don’t want to see that happen again. I doubt it will though. Way too many options for gaming to go to prevent something like that. There’s tons of great games to play these days.

The quarter really lacked content.

The same quarter last year had Returnal, Ratchet, RE8, ME Legendary Edition, FF7R Intergrade, Judgement, Wreckfest etc.

The best games of the quarter this year are Lego Star Wars and, Stray. It's not comparable.

Edit: COD also didnt do too well. Activision was down $650m.

We really need numbers for like pre covid. With covid lock downs you had more people stuck at home/afraid to go out and also movie theaters where closed to and people where not traving so just over all less things to do. You also have the fact that if you are a big sports fan like me you had like 5 months of no NFL, NBA, NHL in 2020 because of covid when in a normal year its like 3.

I think there's lots of variables at play. For one, there's the economy. Besides that, it's been a dry year. Most major releases happened in the first quarter. It would be hard to qualify what impact each has.

Q1 2022 was down 8% YoY while Q1 2021 was up 30% YoY. Could be a decline of engagement with 8th gen devices coinciding with growth of 9th gen adoption, which itself is being hindered by production/supply issues. I imagine a great degree of money people would spend on games is being eaten up by scalper costs. That surely has to be a contributing factor.

I don't think game subscription services are to blame. MS claims Game Pass users have higher user engagement and spend 50% more money on games than non-subscribers. I imagine PS Plus Extra/Premium might have similar correlation.

I actually have pondered whether BC is a factor. Rather than just getting new consoles and putting older ones (and all the games) in the rear view mirror, bridging of 8th and 9th gen catalogs means people playing on current gen consoles have a lot more options, plus older games have enhancements. On the fence about getting some new $70 AAA game? Get one of many celebrated titles you had wanted to play but hadn't found the time to try yet on sale for a few dollars. Or, keep working on your backlog. Current gen consoles are no longer confined to just the slowly growing catalogs of current gen titles.

Anyhow, no point trying to blame one thing right now. The end of the year looks stronger as far as releases are concerned, that might be a better indicator of the market depending on how things go.

As far as economic concerns go, I had heard countless times how when there's recessions, the movie industry thrives because people look for escapes from their troubles. Now we live in an age where gaming is larger than Hollywood. And unlike film industry where tickets and concessions have have always adjusted to inflation, games haven't, making gaming more affordable than ever against modern average wages.

This news should surprise no one who has paid even the slightest bit of attention.

With the economy and "inflation" being what it is (please ignore record corporate profit margins and think nothing of the rising costs there which totally isn't corporate greed squeezing the bottom half for everything they have...) luxury spending is one of the first things to go and video games typically aren't the cheapest hobby to have. So shouldn't come as a shock that after record periods of growth thanks to the COVID lock downs keeping everyone at home the market is once again shrinking.

That's before you get into the lack of releases through the first half of the year, delays, and hardware still being difficult to find gives people all the more reason to hold onto their money and wait.

This was supposed to be a huge year for companies like Microsoft and Nintendo only to see their big games get delayed into next year. Nintendo still has a few games coming but nothing that comes close to something like Breath of the Wild 2.

You will own nothing and you'll like it. :P

Covid

People playing free-to-play games (grinding and not paying)

Economy/inflation/oil prices

Lack of PS5/Xbox Series X consoles to buy

Lack of PC parts

Market saturation and Steam sales.

Emulation and people still playing Xbox 360s and Ps3s

Epic games giving away free games

People who'd normally spend on a new games just sticking to gamepass or PsPlus

There are several reasons I supoose. I think the market has peaked

How much of this is due to the COVID video game spending spree being over?

@SecretPolice said:

You will own nothing and you'll like it. :P

I agree with him, the way our society has been set up in the past 70 years is ... [PG is over that way].

It is worth noting this also does impact how our games are made too, and not in a particularly positive way either. Games are getting prohibitely expensive to make, and as a result, people can't afford to take risks and gamble like they could back in the day. The gaming industry needs some kind of infrastructure change, that could bring down development costs.

@Maroxad: Said .... "[PG is over that way]."

Lololol AwesomeSauce my friend. Thanks for the laughs and playing along. ;)

Although, yes, what was done has had horrible affects on everything including Gaming, or course. Very predictable by the way. The world will be feeling the pain for a long time to come.

I dunno, with more gamers than ever and the rapid move to digital distribution, I would think costs to provide games to the end user should have gone down significantly giving devs and pubs more room to work with?

The state of the market back in '82 and '83 is so much different than today. The only way it which it could happen today would not be the entire market but individual companies offering swill.

Well Nintendo and their 1st party lineup broke through the slump we're seeing. sell-through (i..e games sold to consumers) increased. In fact, it was the second highest first quarter sales of Nintendo's own titles since the launch of the Switch (the biggest Q1 being April to June 2020, spurred on by the launch of Animal Crossing and the onset of the pandemic).

being forced to consider an xbox? ;)

@SecretPolice: that meme of you will own nothing and you will like it.

Meanwhile, the corps sre busy buying up all our homes, and pushing autonomous driving, now video game streaming and Netflix. WHO was right on the money. These dbags are trying to take control of our Iives.

It's saying that mobile is the main cause of the decline. That could be good...maybe that bubble is about to burst.

For the big 3; Overall a decline is expected due to loosening up of restrictions and current economic uncertainty but gaming tends to weather recessions well.

• Nintendo: Shall remain unconcerned. Software and hardware sales remain strong despite the switches age.
• Sony: Can't make PS5s fast enough at the moment. Not a bad place to be.
• MS: Also not too much to worry about. Gamepass subs are not as high as they would like i suspect but it is a very nice money earner for them.

Things are also looking up on the PC front. GPU prices are going in the right direction and next gen hardware is due soon which should, at the very least, put more downward pressure on current hardware too (assuming you dont want the new shiny thing). Valve can't make Steam Decks fast enough either and GPD and Aya are looking to fight back in that sector too...so it should be great. Also getting the MS games and Sony games as well as it's own games.

So yeah....not panic stations time imho....not yet anyway.

While economy is an easy to assume factor, it's been a pretty dry year for big releases as well, most of the notable titles released in 1st quarter. And I think BC might be eating at newer game sales, current gen gamers aren't limited by a limited selection of current gen offerings, there's tons of quality 8th gen offerings compatible with 9th gen systems, with enhanced features, and they're dirt cheap. People also have complete access to their 8th gen backlogs without need to juggle old hardware, possibly another reason to make it less compelling to grab new pricier games. Whether it is the economy and inflation eating away at discretionary spending, or just a less engaged market not buying from the sparse selection of new releases, I think things might be clearer in next couple months as the release schedule starts to look better.