The video game industry has long established itself as a juggernaut in terms of the profits it generates. That’s not expected to change anytime soon, but consumer spending on video games has been declining and may continue to decline.
It has been discovered through data that people are spending less money on video games in 2022, which can be attributed to several reasons.
Spending on video game products fell in the second quarter of 2022
As reported in an August 2022 NPD group press releaseUS consumer spending in the second quarter (Q2) of 2022 was down 13% from Q2 2021.
Total consumer spending was still $12.35 billion. Therefore, even though this is a decrease from the previous year, it is clear that there are still significant profits in the video game industry.
The NPD Group press release also noted that mobile content saw the largest decline, while non-mobile subscription content was the only category seen to see growth from the second quarter of 2021. find yourself only spending money on subscription content for video games, the NPD Group report suggests you’re in the majority.
Why did people spend less on video games in the second quarter of 2022?
There are several factors why people are spending less on video games in 2022 compared to 2021, but not all of them are so clear about whether this drop in spending will become a trend or not.
1. Global inflation and spending trends
It is no secret that there is a period of global inflation. As the NPD Group reported, increases in food and gas prices will likely make spending on video games less justifiable. Consideration should also be given to rising energy costs and general financial uncertainty globally and individually.
The NPD Group also noted how live events and travel spending are rebounding from the COVID-19 pandemic, which explains why customers may not have as much money to spend on video games as they do. previously. If you are in a time of financial uncertainty but still want to continue enjoying your video game hobby, using the best game discount sites to buy cheap video games can help.
2. Supply issues with material
The PlayStation 5 has encountered supply issues due to a shortage of chips, as reported in a Sky News article. Graphics cards and processors have also been hit by chip shortages, which has reduced the number of people who can buy a PS5 or upgrade their PC.
These supply issues could be contributing to declining video game sales as there are fewer people able to buy new consoles and the new games that come with them. Many gamers are likely to wait until they have the latest generation of consoles before playing the newest games in order to get the best performance.
You can expect supply issues to ease over time, but it likely affected game sales in 2022. As the NPD Group reported, PlayStation 5 hardware accounted for the highest dollar sales. higher in the second quarter of 2022. This suggests that there is still strong demand for video game spending, but it’s likely that people are just waiting for supply issues to subside.
3. The rise of subscription services
As reported by the NPD Group, subscription content was the only area of video game sales that grew during the second quarter of 2022. That, along with developments in the industry to push cloud gaming into the mainstream, have shown that the gaming model is shifting towards streaming services. rather than buying games directly.
You’re probably familiar with the Xbox Game Pass and PlayStation Plus services even if you haven’t used them yourself. These services continue to grow in popularity with other companies also joining in and offering more cloud gaming services.
Xbox Game Pass, PlayStation Plus, and other subscription services offer a more affordable price for many gamers, depending on your situation. Given that subscription content was the only video game sales category to increase, it could be that consumer spending is shifting from outright ownership to subscriptions rather than actually decreasing.
4. Growing Popularity of Free Live Games
Free live service games have been around for a while now, you’ve probably played one of them. Fortnite, Call of Duty: Warzone, Grand Theft Auto Online and many more are all hugely popular games that have stood the test of time in the gaming landscape.
These three games have been listed among the top selling and most played games of the second quarter of 2022 by the NPD Group, demonstrating the continued dominance of these titles in the gaming market.
As more and more games with this model continue to be released, video game sales may decline as gamers generally choose to stick with free-to-play titles.
Will spending on video games continue to decline throughout 2022 and beyond?
While it is a fact that spending on video games has largely declined in 2022 compared to the previous year, it remains to be seen whether this becomes a trend or a one-time situation as the world moves from the pandemic and the financial uncertainty to a new normal.
Living in a hyper-capitalist world, you are probably aware of the need to reduce your spending on video games as much as possible. Fortunately, there are several ways to save money on games.