Circana analyst Mat Piscatella has shared his thoughts on the current state of the video game market. He expects 2024 to be a tough year with a high level of uncertainty around sales, hardware, and content.
Helldivers 2
In an interview with GamesIndustry.biz, Piscatella noted that US video game spending could fall 2% compared to 2023 on the “most optimistic” outlook. “If you start looking a little bit on the more pessimistic side, you’re looking at down about 10%,” he said. “If things really go sideways, you’re looking at a little bit more.”
According to Circana, US consumers spent $57.2 billion on video game content, hardware, and accessories last year. If Piscatella’s outlook is correct, the market’s annual revenue could fall to $56 billion or even $51.5 billion in 2024.
There are several factors that indicate a possible decline in games spending:
- Overall uncertainty (“probably the highest I can recall”) around all segments of the market, with not enough big games confirmed for this year and other big drivers like the next Nintendo console reportedly pushed for 2025;
- Huge contrast in terms of major releases compared to 2023, when Hogwarts Legacy became the best-selling game with 22 million copies sold and continues to perform well in 2024;
- Palworld and Helldivers 2 boosted games spending at the start of the year, but Piscatella says we need another game like this to try to comp what Hogwarts Legacy did in 2023;
- Retail will continue to decline: Piscatella noted that while retailers started to make money from selling gift cards for games like Fortnite and Roblox, they still rely heavily on Nintendo due to its high share of physical sales (around 50%) compared to other predominantly digital platforms.
Despite the projected decline, the US games market has a chance to start growing in 2025 — especially with the release of GTA 6. As Piscatella says, “there’s probably never been a more important thing to ever release in the industry.”