The video game industry has long been a behemoth in terms of the profits it generates. That probably won’t change anytime soon, but consumer spending on video games has fallen and could continue to fall.
Data shows that people will spend less money on video games in 2022, which could be for a variety of reasons.
Video game product spending down in Q2 2022
As reported in an August 2022 press release by the NPD Group, US consumer spending declined 13% in the second quarter (Q2) of 2022 from Q2 of 2021.
Total consumer spending was still $12.35 billion, so while it’s down from the previous year, it’s clear that significant gains are still being made 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 to see growth compared to the second quarter of 2021. If you find yourself spending only on video game subscription content The NPD Group report suggests that you are in the majority.
Why did people spend less on video games in the second quarter of 2022?
There are multiple factors why people will spend less on video games in 2022 than they would in 2021, but not all of them are equally clear as to whether this decrease in spending will become a trend or not.
1. Global inflation and changes in spending
It’s no secret that a period of global inflation is underway. As the NPD Group reported, increases in food and gasoline prices are likely to make video game spending less responsible. There are also increases in energy costs and general financial uncertainty at a global and individual level to consider.
The NPD Group also noted how live events and travel spend bounced back after the COVID-19 pandemic, explaining why customers may not have as much money to spend on video games as they did before. If you are in a period of financial uncertainty but want to continue enjoying your video game hobby, it can help to use the best game discount sites to buy video games cheap.
2. Hardware Delivery Issues
The PlayStation 5 is experiencing delivery issues due to a chip shortage, as reported in a Sky News post. Graphics cards and processors have also been hit by chip shortages, leaving fewer people able to buy a PS5 or upgrade their PC.
These delivery issues may contribute to the decline in video game sales as fewer people are able to buy new consoles and the new games that come with them. Many gamers will probably wait until they have the latest generation of consoles before playing the latest games to get the best performance.
You can expect delivery issues to ease over time, but it will likely impact game sales in 2022. As the NPD Group reported, PlayStation 5 hardware accounted for the highest dollar revenue in 2022 Q2. This suggests that video game spending is still in high demand, but it’s likely that people are just waiting for the supply issues to calm down.
3. The Rise of Subscription Services
As the NPD Group reported, subscription content was the only area of video game sales that rose in the second quarter of 2022. That, as well as industry developments to make cloud gaming mainstream, have shown that the gaming model is moving toward from streaming services instead of buying games.
You probably know 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 joining in and releasing more cloud gaming services.
Xbox Game Pass, PlayStation Plus, and other subscription services offer many gamers more affordability, depending on your situation. Since subscription content was the only category of video game sales to increase, consumer spending may move from wholly owned to subscriptions rather than actually decline.
4. Increasing popularity of free-to-play live service games
Free-to-play live service games have been around for a while, you’ve probably played one of them. Fortnite, Call of Duty: Warzone, Grand Theft Auto Online and more are all very popular games that have stood the test of time in the gaming landscape.
All three of these games were listed by the NPD Group as the best-selling and most-played games of the second quarter of 2022, demonstrating the continued dominance of these titles in the gaming market.
As more games are released with this model, it’s possible that video game sales will drop as players generally choose to stick with free-to-play titles.
Will video game spending continue to fall in 2022 and beyond?
While it’s a fact that video game spending has largely fallen in 2022 compared to the previous year, it remains to be seen whether this will become a trend or a one-off as the world moves out of the pandemic and financial uncertainty into a new normal.
If you live in a hyper-capitalist world, you are probably aware of the need to reduce your video game spending whenever possible. Fortunately, there are several ways to save money on gaming.
0 Comments