US Gamers Are Spending a Lot Less On Video Games

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 Verge reports: The findings follow both Microsoft and Sony reporting revenue declines in gaming as the pandemic growth slows. [...] 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."

Covid lockdowns, supply shortages

[HalAtWork]

During covid lockdowns people were spending more. Now they've gone back to doing other things and are playing less.

New consoles have launched but supply constraints mean they're getting into few hands. People might be playing less because they can't get the latest and greatest.

Re:Covid lockdowns, supply shortages

[youngone]

If the landlord raises the rent 25% and the boss raises your pay 0% you might not have money left over for games.

Re:

[Powercntrl]

If the landlord raises the rent 25% and the boss raises your pay 0% you might not have money left over for games.

Really. This is a non-story. It's obvious that when the cost of living goes up that spending on entertainment will go down. It might be a hard concept for fat cat corporate CEOs to grasp, but the average working person doesn't have a "hookers and blow" fund.

Re:Covid lockdowns, supply shortages

[Dutch Gun]

I think it's more about the lockdown bubble popping than anything, and gaming revenues are getting back to normal. Combine that with supply shortages (it's still hard to get the latest-gen consoles), and this isn't too unexpected.

When I first got into the videogame industry, I assumed that it would be hit hardest by recessions, since it's obviously reliant on very discretionary spending. But as it turns out, apparently, most people still have enough cash to for a few videogames here and there. I think it's more the big ticket items that get postponed, like that big vacation, new car, or house remodel. A $60 game here and there is not going to break the budget. Hardly "hookers and blow" sort of expenses. And some games can offer dozens to hundreds of hours of gameplay, so they're a pretty good entertainment value, especially if you already have a console or computer.

So, yeah, the videogame industry is surprisingly recession-resistent, at least in my experience over the last quarter century. It kind of makes up for that by being a rather volatile industry even in good times.

Re:

[thegarbz]

I think it's a different supply issue. What good games have come out in Q2? There has been such a dearth of compelling games. Q2 was typified by re-releases on other platforms, remasters, or flat out terrible games.

Most compelling games came out in Q1.

Or maybe people just don't have a console to play on after they threw their xbox controller at the TV while playing Elden Ring and swore off gaming when they realised controllers were also out of stock.

Re:

[RobinH]

One of the best businesses during a recession is breweries. Movies is another one. Video games fall into that same category. In tough times, people look for escapism. The reality is that lockdowns pumped up alcohol, streaming, and video games, and now with unemployment really low, COVID not in the news every day, and summer in the northern hemisphere, people are out doing other things. Yeah, there's a lot of bellyaching and we're "technically" in a recession, but overall there's still a lot of demand f

Re:

[RobinH]

Of course it is. The boomers are in the midst of retiring. Participation's going to keep going down and down until boomers start moving into nursing homes (at which point they're no longer in the denominator). Sure, COVID made a few people take early retirement, but it's not like there's a whole bunch of 20-somethings sitting around going, "man, I just can't find a job!" Anyone saying they can't find a job just isn't actually looking. Walk into any factory or restaurant, they'll hire you on the spot.

Re:

[mjwx]

I think it's more about the lockdown bubble popping than anything, and gaming revenues are getting back to normal. Combine that with supply shortages (it's still hard to get the latest-gen consoles), and this isn't too unexpected.

When I first got into the videogame industry, I assumed that it would be hit hardest by recessions, since it's obviously reliant on very discretionary spending. But as it turns out, apparently, most people still have enough cash to for a few videogames here and there. I think it's more the big ticket items that get postponed, like that big vacation, new car, or house remodel. A $60 game here and there is not going to break the budget. Hardly "hookers and blow" sort of expenses. And some games can offer dozens to hundreds of hours of gameplay, so they're a pretty good entertainment value, especially if you already have a console or computer.

So, yeah, the videogame industry is surprisingly recession-resistent, at least in my experience over the last quarter century. It kind of makes up for that by being a rather volatile industry even in good times.

Also consider quality and availability.

Up until very recently getting your hands on an affordable GPU has been like finding rocking horse poo. The so-called "next"-gen consoles are still difficult to get ahold of. Even then once you've got your shiny new toy, there's not much on it worth buying. I was fortunate enough to get a 3070 FE a bit under a year ago... A fantastic card but there's not much out there that utilises RTX, let alone requires a card that powerful. Yeah, it's a huge upgrade from my 970

Re:

[drinkypoo]

When I first got into the videogame industry, I assumed that it would be hit hardest by recessions, since it's obviously reliant on very discretionary spending. But as it turns out, apparently, most people still have enough cash to for a few videogames here and there.

In general people still spend on booze and sweets during recessions. Gaming makes sense, too. The value of a game can be much higher than other forms of entertainment, and you don't have to go anywhere to do it so it's saving on transit costs too.

Re:

[Rogue974]

There are several industries that are inversely proportional to the economy. My FIL worked for a company that makes candy and their industry is inversely proportional to the economy as you stated. Times are going good, people spend money on big things to get their happy fix, but when it goes bad, they can get a quick cheap happiness fix from a milky way or mars bar and they are cheap compared to a vacation, new wardrobe, car, etc.

Generic products are the same way. I am short on cash and I like the expens

Re:

[ranton]

Really. This is a non-story. It's obvious that when the cost of living goes up that spending on entertainment will go down.

But it isn't obvious what sectors of the gaming entertainment will have reduced spending. I for instance would be more likely to shift money spent on vacations or live plays / musicals to gaming when money is tight. Gaming costs a fraction of the what I spend on the other two activities listed. $120 can buy me two recent games giving me dozens of hours of entertainment, or it can buy one seat at a musical downtown.

I think this has far more to do with the lockdowns ending than it does inflation, because gami

Re:

[Ed Tice]

I don't understand why anybody is comparing anything to lockdown-levels. Compare revenue to pre-lockdown levels to get a better idea of market trends. It seems that there are companies out there that benefitted from the covid pandemic and rather than recognize that it was a one-time event and leverage the window of opportunity, they pretended as if their revenues were going to remain stable or grow when the pandemic ended. The one thing that continues to trend upward is corporate stupidity.

Re:

[Baloo Uriza]

This, right here, is it. The corporate and billionaire class used the last two years to enrich themselves at the public and working class's expense.

Re:

[mark-t]

Where do you live that it is legal for a landlord to raise rent by 25%?

Re:

[youngone]

What do you mean? Landlords where I live charge what the market will bear. Its capitalism 101 and yes, we do have a housing crisis, thanks for asking.

Re:

[mark-t]

What I mean is that most jurisdictions I am aware of there are laws that cap allowable landlord rent increases to some nominal amount over inflation, and even then often no more than once every 12 months. Where I live the annual cap is set to inflation + 1.5%.

Re:

[youngone]

Landlords can charge what they like where I live, so they do.

Re:

[mark-t]

Like I said, where do you live that they are allowed to do this?

Re:

[youngone]

Why do you want to know where I live?

Re:

[mark-t]

I'm curious about the jurisdictions don't have any laws against it.

Re:

[youngone]

Are you? Weird.

Cancelled XBox Game Pass

[timeOday]

Forza Horizons would be fun for a couple weeks, then do a forced patch with another 100 GB download, then not work at all, then get another patch and mostly work for a while, then autopatch again and stop working...

Backlog

[Tempest_2084]

I don't know about everyone else but I used the lockdown to work through my game backlog. I'm not revisiting old favorites and since I like open world RPGs a game can last me 40-60 hours easy. I've picked up a few new games here and there (Xenoblade Chronicles 3 recently) but mostly I've decided to play what I have. There are nice new games out there but I'm so busy with other things right now that they can wait. I'm well past the "gotta buy it on launch day" part of my life. Not to mention if you wait you can get all the DLC and bug fixes included with the game.

Re: Backlog

[Tempest_2084]

That should be "I'm now revisiting". I blame my typo on the absinthe...

Re:

[Darinbob]

Yup. There's not a whole lot exciting in new games, and not for some time. Meanwhile the older games are still great; maybe not cutting edge graphics but they run with great performance and are still loads of fun. There' are some things i'm looking forward to, but there have not be ANY "must play" games for some time (last was maybe outer worlds, but I played during pandemic, before going back and replay bloodlines, fallout etc).

Would be interesting to see spending vs playing

[joeflies]

I.e. are US gamers playing less? That should be as easy to measure as a nielsen rating, and it would add a lot more interesting analysis than just measuring spending.

On top of that it would be valuable to add other metrics like how has game length affected purchasing, now that games easily surpass 100+ hours. What about the higher net cost of a game given that you can't recover some of the money by selling games you've completed?

Re:

[_xeno_]

That should be as easy to measure as a nielsen rating, and it would add a lot more interesting analysis than just measuring spending.

Easier, in fact: pretty much every major gaming platform reports what games peoples are playing back to the platform owner for a variety of reasons. The main reason is social networking: to let your friends know what you're playing. Steam, Xbox, PlayStation, Nintendo with the Switch: they all have "friend's lists" and they all have the ability to track what you're playing and how long you've been playing it. In some cases you can opt out but most people don't.

So, in short, large publishers already have the

Re:

[thegarbz]

No gamers aren't playing less. There was a big move to subscription services not to mention many people are still working through all the games they bought in the Steam sales last year when everyone was cashed up and stuck at home.

Re:

[argStyopa]

What new games offer 100+ hours of gameplay? From what I've noticed, the game in the box now typically offers 50-60 (some as little as 30) hours of game play.

While I am not a US gamer

[topnob]

while I am not a US gamer, I am a gamer, and the reason for me is, there have been no games that are exciting or interesting to me coming out... there is somewhat of a drought of good games... Some Co-Op multiplayer games would be good. I suspect its also because of the trend to just update your game like Fortnite, so a you don't need to play another game to get new content and secondly the games companies are busy updating games instead of making whole new games.

Re:

[MrL0G1C]

The AAA video game industry isn't interested in making new or exciting games, they're so steadfastly focused on the getting the last drop of money out of 'whales' through 'monetisation'. Now when you buy a game it's just a shell of a game and you have to buy season passes and DLCs to get one half of the game and then to really progress at any reasonable rate you have to gamble with via $100s worth of loot boxes.

I hope people catch on to this crap.

Re:

[Asynchronously]

Thanks to dipshits spending tens of thousands of dollars on games like Diablo Immortal this has become a viable strategy for game devs to make oodles of money.

Re:

[sd4f]

I think people are slowly cottoning on. The proliferation of "free-to-play" games means that even they compete against each other, however it takes a certain level of critical mass that these games need in order to allow the game mechanics to be unstained by purchasable content. For instance, many of the most popular free games make a big deal that the purchasable content is cosmetic only, but I think they can, because when they have hundreds of thousands of players at any one time, the game is vibrant, and

Besides the Horizon Zero Dawn sequal

[rsilvergun]

have there been any major releases? Overwatch 2 is by all accounts a mediocre expansion pack to an old game. Call of Duty churn can only do so much for the industry. I couldn't name another big release. That's going to hit sales hard. And as other's pointed out the lockdowns ending mean less spending on games.

Re:

[Asynchronously]

Elden Ring comes to mind.

Microtransactions, loot boxes, crypto/bitcoin...

[reynolds_john]

I bought Battlefield 2042. What a complete mistake, and utter joke. Call of Duty... 9? Whatever. Overwatch 2? More like Overwatch 1 sub-DLC. Ubisoft? The open worlds were once amazing, but hey - re-skinning the world every 2 years for 10+ years just isn't very appealing any longer. And yea, to hell with your management and their lust for microtransactions... every game is an exhausting grind.

Taking your franchise and making the nth iteration, then jamming it with micro-transactions and loot boxes isn't exactly grabbing my attention... or that of my teen kids either... let that sink in.

I've started buying more indie, waiting patiently for early access to come to fruition (if it ever does), and reading a lot more about how to spend my money. And oh, I don't trust your YouTube brigades of gushing influencers... I'll wait for the players to weigh in.

At this point a lot of us have been burned by once great studios, and we're simply more cautious.

I spent my dwindling gaming budget on hardware

[drinkypoo]

Now that GPU prices are coming down, I was able to get a reasonable deal on a 1070, which is still way more GPU than I have right now (2x 950.) Now I just need to sell my 950s to recoup whatever percentage I can... And now I'll be able to play a bunch of the stuff I already own at higher settings.

I had lots of competition, so I can see other people are doing the same thing. If they're buying used GPUs too, which they are, then it's likely that they also aren't blowing a bunch of money on games.

Re:

[Gilgaron]

I also finally got around to upgrading GPU and will be working through my backlog of Steam sale stuff that didn't quite run well before. One thing I've noticed looking for deals on games I want to get to eventually is that games tend not to go down in price very fast when they're distributed digitally vs physically where there'd be shelves to get clear.

And that's a surprise?

[Opportunist]

Between new consoles being about as easy to get a hand on as a RasPi, increased cost of living that forces people to cut down on unnecessary expenses (and let's face it, when facing the question "new game or food", games rarely win) and games being made more and more along the lines of "$title_name $current_year" while being essentially the same as "$title_name $last_year", that's a surprise?

Really?

Subscriptions . . .

[indytx]

We bought an Xbox Series S with Game Pass Ultimate. There is such a huge catalog of games that there is not need to buy anything, and as an added bonus I get PC Game Pass. I don't know how we could possible play all of the games. Why pay more?

Too many games

[Reteo Varala]

I don't know about anyone else, but I currently have 1000+ games, and half of them have never even been started. Sooner or later, it just gets to the point where you just decide that there is no point to buying more.

It's almost like there's a recession going on

[sabbede]

But that can't be it, right? Just because the economy shrank for at least two straight quarters doesn't mean there's anything amiss, Joe Biden said so.

filthy degenerates

[ElizabethGreene]

We spent all our money on Gamestop stock and tendies.

Unplayed games

[Hydrian]

Looks at unplayed games in Steam library...

Cheetos

[groobly]

Of course they are spending less: the price of Cheetos has gone WAAAYYY up.

Vote with your wallet...

[gimmeataco]

For me, I've spent less because the game companies have shipped garbage for several years. Now GTA6... shut up and take my money.

Why is this surprising?

[mark-t]

Inflation is the highest its been in decades, people are having to cut back on things like entertainment just to survive.