The big picture: This year is shaping up to be a pretty dark year for the video game industry. It started with his two sleeper hits, Helldivers 2 and Palworld, and unexpectedly gained a massive following with gamers hungry for something new. But there aren't many prospects in 2024 expected to surpass his 2023 consumer spending, which Hogwarts Legacy almost single-handedly pushed up.
Respected Circana (formerly NPD) Analyst matt piscatella According to , spending on gaming software and hardware in 2024 is expected to decline by more than 2 to 10 percent compared to last year.
“My most optimistic outlook right now is about a 2% decline,” Piscatella said in an interview with GamesIndustry.biz. “If we start to look a little more on the pessimistic side, we're looking at about a 10% decline. If things really go sideways, we'll see a bit more decline.”
There is currently too much “uncertainty” in the industry to be optimistic. There's nothing to get excited about over the next few months, as most of the expected hardware and software is scheduled for next year.
Click here for a great interview with Circana @MatPiscatella About the year ahead, why the industry needs more great titles like Helldiver 2 and Palworld, and why GTA 6 is the most important release in gaming history https://t.co/5Ooj7vUbLs
– James Batchelor (@James_Batchelor) March 13, 2024
“When you look at the sales data and look at the forecast for this year, there's a lot of uncertainty,” he said. “There's uncertainty about the hardware. There's uncertainty about the content. Who's making the games?”
In fact, the next anticipated blockbuster is Grand Theft Auto 6, which, barring any delays, won't arrive until 2025. The Switch 2 (or whatever Nintendo calls it) also won't arrive until next year at the earliest. PlayStation doesn't have any big first-party titles in store for 2024. So we're left with nothing but a mediocre game that has no chance of catching up to Hogwarts' legacy, which dominated 2023 and continued to sell well during the first few months of this year.
When asked if the Pro versions of PS5 and Xbox Series X will help, Piscatella said, “Don't count on it.” It's unlikely that Sony and Microsoft will launch “pro” versions of their consoles this year, but he couldn't confirm that because the NDA is “less than 1 billion.” But he said no one has told him that the companies plan to launch any hardware this year.
Anyway, it's debatable. Even if a revised version of the console arrives by the holiday season, it won't have the “halo effect” needed to break the industry's recession. Midlife upgrades attract only a small portion of the market. These buyers tend to “give away” their old consoles to friends and family to free up space for refreshment. The so-called “Pro” launch has minimal impact on the industry as a whole. It aims to “stabilize” slowing sales of gaming consoles as companies work to design next-generation hardware.
either way
– Player count and play time peaked in 2021
– Black Hole Game Dominates Play
– Rising prices in everyday expense categories such as food and rent are putting pressure on wallets, especially among young people and those who are less affluent.
But those are the boring reasons why the current VG market is what it is.– Matt Piscatella (@MatPiscatella) March 13, 2024
Other factors, such as inflation, are also holding down gaming-related sales. Consumers have much less discretionary income and gaming budgets are low for most people.
Brick-and-mortar stores will take the biggest hit in 2024. Brick-and-mortar stores are already starting to lose out to digital sales. Walk through the games section of your local Walmart and you'll see a paper-thin stock of new games lined up on shelves one-third the size of what it was ten years ago. Piscatella said that without the Switch 2, sales at game stores and gaming departments would be significantly lower.
“Retail has had to get really smart, but the physical side of the business continues to decline,” Piscatella said. “With no new Nintendo hardware coming out this year, that trend will accelerate because Nintendo is at a 50/50 split when it comes to physical and digital, whereas every other company is That's why retail is still far more reliant on Nintendo than any other company's platform. ”
The silver lining around this dark cloud is that retailers can expect continued growth in gift card sales. Whether it's a PlayStation Network or Game Pass subscription, or just a physical “cash” card stuffed in your stocking, gaming gift cards are steadily growing.
