Video game industry headed for a 10-percent slump in consumer spending

[Cal Jeffrey]

The big picture: This year is looking pretty bleak for the video games industry. It started with two sleeper hits, Helldivers 2 and Palworld, unexpectedly gaining massive followings with gamers voraciously craving something new. However, there's not much on the horizon expected to push 2024 past 2023's consumer spend, which Hogwarts Legacy almost single-handedly drove.

Respected Circana (formerly NPD) analyst Mat Piscatella says spending on gaming software and hardware in 2024 will dip 2-10 percent or more compared to last year.

"Right now my most optimistic outlook is down about 2%," Piscatella said in a GamesIndustry.biz interview. "If you start looking a little bit on the more pessimistic side, you're looking at down about 10%. If things really go sideways, you're looking at a little bit more."

There is currently too much "uncertainty" in the industry to be more optimistic. The coming months are devoid of anything to get excited about, with most of the highly anticipated hardware and software slated for next year.

Great interview here with Circana's @MatPiscatella about the year ahead, why the industry needs more overachievers like Helldivers 2 and Palworld, and why GTA 6 is the most important release in games historyhttps://t.co/5Ooj7vUbLs

- James Batchelor (@James_Batchelor) March 13, 2024

"There's so much uncertainty when you look at the sales data or look to project this year," he said. "There's uncertainty around the hardware. There's uncertainty about the content. Who the hell's making the games?"

Indeed, the next forecasted mega-hit is Grand Theft Auto 6, and barring any delays, that won't arrive until 2025. Switch 2 (or whatever Nintendo calls it) will also not land until next year, at the earliest. PlayStation has no big first-party titles on deck for 2024. So there's nothing left other than mediocre games with no chance of catching up to Hogwarts Legacy, which dominated 2023 and continues to sell well in the first months of this year.

When asked if Pro versions of the PS5 and Xbox Series X would help, Piscatella said, "Don't count on it." There is a slim chance that Sony and Microsoft will launch "Pro" versions of their consoles this year, but he could not confirm that due to being "under a billion NDAs." However, he did say that nobody has told him either company plans to launch any hardware this year.

It's a moot point, anyway. Even if console revisions were to arrive by the holiday shopping season, they wouldn't have the "halo effect" the industry needs to beat the slump. Midlife upgrades only attract a small section of the market. Those buyers tend to "hand down" their older consoles to friends and family to make room for the refresh. So-called "Pro" launches have minimal effect on the overall industry. They are more to "stabilize" slowing console sales as companies work on designing next-gen hardware.

Anyways
- player count and hours peaked in 2021
- black hole games dominate play
- high prices in everyday spend categories like food and rent have squeezed wallets, particularly among younger & less affluent.
But those are boring reasons for current VG market being the way it is

- Mat Piscatella (@MatPiscatella) March 13, 2024

Other factors like inflation are also dampening gaming-related sales. Consumers have much less discretionary income, and games are low on most people's budgets.

Physical retail will take the biggest hit in 2024. Brick-and-mortar stores are already losing out to digital sales. Walk through your local Walmart's gaming section, and you'll see the paper-thin stock of new games on shelves that are one-third the size they were 10 years ago. Piscatella says that without a Switch 2, gaming stores and departments will see a significant dip in sales.

"Retail's had to get really clever, and on the physical side of the business it continues to decline," said Piscatella. "With no new Nintendo hardware this year, it's going to accelerate because Nintendo is right at the 50-50 cusp when it comes to physical/digital, but everyone else is way digital. So retail still relies on Nintendo much more than they do other platforms."

The silver lining around that dark cloud is that retailers can expect continued growth in gift card sales. Whether it's PlayStation Network or Game Pass subscriptions or just physical "cash" cards stuffed into stockings, gift cards for gaming have steadily grown.

Permalink to story.

https://www.techspot.com/news/102266-video-game-industry-headed-10-percent-slump-consumer.html

 

[The Talking Tech]

"Lack of new hardware, blockbusting games, and inflation puts the pinch on retailers and game makers"

Those are NOT the reasons...the real reason is gamers are getting tired of buying full priced half-assed games that feel no better than buggy demos filled with microtransanctions and over priced DLC.

 

[Burty117]

I just saw Destiny 2’s next DLC is £83.99

No offence to Bungie but that’s a lot of money for what will probably be fairly crap expansion.

 

[mrvco]

What about Microsoft’s highly anticipated 10” Mobile Deck?

 

[Mr Majestyk]

Your Honor I present exhibit A: Skull and Bones

A steaming POS that is way worse in every way possible than the 2013 Blackflag it is based on. And these scumbags claim it's AAAA game. This is so typical of the steaming POS AAA titles being released with ludicrous price tags. Barely a single game in the last few years has wowed me. Why would I waste money on latest GPU to play AAA cr@p.

 

[ShadowDeath]

"Lack of new hardware, blockbusting games, and inflation puts the pinch on retailers and game makers"

Those are NOT the reasons...the real reason is gamers are getting tired of buying full priced half-assed games that feel no better than buggy demos filled with microtransanctions and over priced DLC.

Yup, AAA game devs who will release patches that "address issues" but never actually fix them. Then they just pretend like the game is fine after that. *cough*EA*cough*

 

[GodisanAtheist]

Yeah lot of reasons, obviously there are broader economic issues at play but really gaming is easily one of the best bang for buck entertainment options out there so I don't entirely buy the inflation argument.

You'd actually think tougher times would drive gaming since it's so much cheaper than traveling or buying physical material for a hobby.

I think:
- Cookie Cutter games: everything AAA is an open world action RPG lite. That's why stuff like Palworld and Helldivers 2 are such sensations, they're something different and done really well.

- Crappy, low quality launches. We know gamers are stupid dopamine driven drug monkeys and will keep throwing money after garbage preorders despite getting burned again and again and again, but everyone has a breaking point. I've always patient gamed, but waiting a year before buying is almost required now to get a decent experience with most games.

- A Glut of Choice. There are more games available for people to play now, even on consoles with backwards compatibility etc (nevermind something like Steam) that you probably already own something you can play. The need to buy something new because you have 6 games on your shelf and you've played them all to death isn't really a thing anymore (if you're an adult with a job like most gamers).

 

[quatwin]

Don’t forget gamer gate part deux coming into play as well

 

[Atmajaya2020]

The need to buy something new because you have 6 games on your shelf and you've played them all to death isn't really a thing anymore (if you're an adult with a job like most gamers).

true,
in my younger days, in a day, I spent many hours to play, now I only has 2-4 hours to play the game I bought..
working and commuting has taken most of my time..

 

[Achaios]

There's just 9 games in my Steam Library and I haven't bought a new game since I don't remember exactly how many years go.

IMO modern games are just not as good as some of the classic games of years ago such as WoW.

Ofc I am employed too and my job is very demanding and I usually don't have time to play games every day. I usually game in the weekends or every 2-3 weekdays.

One of the most satisfactory things I did in my life was balancing work and devoting much of my spare time to play WoW and WoW:TBC and WoW:WOTLK back in the 2000's.

I do not think that there are games now that are as good and as addictive as WoW was and that because the people who used to make such games are not active any more in the industry.

See Blizzard for example, it has been purged of all the old hands and now it's full of newbies who have got nothing in common with the Founders and their modus operandi and their vision.

I think WoW was the best game I ever played and I consider myself fortunate to have been there and done that. I honestly do not think that the modern "AAAA" game industry is capable of producing a game just as good.

 

[James Ryan]

With the state of the economy now most people will just buy a few games on Steam sale to last them until the next one. There's an almost endless supply of great games around. If they didn't release a single new game for 2 years we'd still have mountains of good content to get through. AAA games are fairly average these days with the exception of Baldur's Gate 3 recently.

 

[Disiw]

No wonder when prices went south and quality dropped. Gameplay is what matters in the end.

Games still sell very well when priced right and made with love.

Helldivers 2 baby. For Liberty! I'm doing my part.

 

[Theinsanegamer]

Yeah lot of reasons, obviously there are broader economic issues at play but really gaming is easily one of the best bang for buck entertainment options out there so I don't entirely buy the inflation argument.

You'd actually think tougher times would drive gaming since it's so much cheaper than traveling or buying physical material for a hobby.

I think:
- Cookie Cutter games: everything AAA is an open world action RPG lite. That's why stuff like Palworld and Helldivers 2 are such sensations, they're something different and done really well.

- Crappy, low quality launches. We know gamers are stupid dopamine driven drug monkeys and will keep throwing money after garbage preorders despite getting burned again and again and again, but everyone has a breaking point. I've always patient gamed, but waiting a year before buying is almost required now to get a decent experience with most games.

- A Glut of Choice. There are more games available for people to play now, even on consoles with backwards compatibility etc (nevermind something like Steam) that you probably already own something you can play. The need to buy something new because you have 6 games on your shelf and you've played them all to death isn't really a thing anymore (if you're an adult with a job like most gamers).

I'm going to add onto that
-ITS A LiVe SeRvIcE JOB
I work full time. I go to the gym. I have friends. I have maybe 10 hours a week to play games. So many of them now have season passes and grindy unlock trees. I do not have time to play 40 hours a week to meet your season pass requirements for advancement. I just want to play games. Working a part time job isnt fun, why would I want my games to be jobs?

Helldivers 2 is guilty of this. Not as bad as others, but there are still game affecting unlocks in that season pass.

-MISSING CONTENT
so many games these days launch missing tons of features from their predecessors 10 years ago, battlefield, halo, CoD, the list goes on. What features ARE there are just broken, poorly implemented, or removed at a later date because the devs cant keep up. All these remakes are inferior to the original games, and we're sick of terrible experiences. Game modes, maps, and optional weapons, these are EASY to implement. If modders can fix your games in less then a week, your dev team deserves to be fired.

-BLATANT TERRIBLE WRITING (and political ideology)

Do I even need to go into this one? How many more games written for "modern audiences" do we need? I'm sick of games being written worse then a 3rd grader's book report. I'm tired of political vies being shoved into dialog as a "character". I'm tired of the millennial stereotype boss babes, the token minorities shoved in your face because they're MINORITIES GUYZ, the constant whedon quips shoved into every single scene, you get the idea.

Can we have decently written characters back already? Stories written by people who actually care about what they make? Can we stop outsourcing to Sweet Baby Inc and it's 18 cousins who ruin everything they touch? Look at the writing in Helldivers! That's all you need! Less "saints row self owned" protags, more Sergeant Johnsons!

Oh wait.....no, I forgot, we now need to "investigate" gamers, because they dont like this ideology they shove into everything nowadays.

https://twitter.com/i/web/status/1768315003319574763

The western game industry is an absolute disaster. The sooner it begins to collapse, the better. Thankfully we have a backlog of literal decades worth of good games to play.

 

[vimann]

Just fire as many people as possible and only make live service games

 

[gdavid65]

To be totally honest I'm totally fine with this... 12 months of no big releases allows me to catch up on plenty of games I haven't had time to play or finish from the last 5 years at least. Heck, give me 2 years

There is so much games shoved onto the market these days, many of questionable quantity, it is no wonder many are becoming fatigued out there.

But take the good ones over time, and there are plenty of those, even if it took the devs 2 years to fix all the bugs, there is plenty of life in those. Ignoring the "play once and forget", some of those are still enjoyable with 2+ play throughs.