Game over for the Gaming Industry? Console makers, publishers face slowdown after decades

In a stark turn of events, the $200 billion gaming industry faces its most significant slowdown in three decades, as the meteoric rise fueled by mobile gaming and the latest console generations hits a plateau.

Recent data reveals a deceleration in hardware sales, with Sony revising its forecast for PlayStation 5 sales. Moreover, consumer expenditure on mobile gaming dipped by 2 per cent to $107.3 billion last year, according to Data.ai, with forecasts indicating only modest single-digit growth for 2024.

Contrary to the industry’s expectations for a swift rebound following the post-pandemic slump in 2022, last year failed to deliver the anticipated growth. Quarterly reports from major publishers like Electronic Arts and Take-Two have failed to impress investors, leading to further job cuts in the sector.

Piers Harding-Rolls, games research director at Ampere Analysis, underscores the prevailing commercial anxiety regarding growth, profitability, and market impact, as the industry navigates a slower growth trajectory.

Of particular concern is the absence of new gaming devices driving market expansion. The initial surge from the latest PlayStation and Xbox consoles released in 2020 has tapered off, compounded by a global decline in smartphone sales, limiting new player acquisitions, particularly in the lucrative mobile gaming segment.

Sony’s Hiroki Totoki forewarns of a gradual decline in PlayStation 5 sales, attributing it to the console nearing the latter half of its cycle. Microsoft, trailing behind Nintendo and Sony, eyes new revenue streams after acquiring Activision Blizzard for $75 billion last year.

Amidst this landscape, the impending release of a new Nintendo console threatens to exacerbate the downturn in PlayStation and Xbox sales.