HomeTechnologyVideo game industry not recession proof, sales expected to drop in 2022

Video game industry not recession proof, sales expected to drop in 2022

The PlayStation 5 logo pictured at a store in Krakow, Poland.

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Video game sales are set to fall annually for the first time in years as another industry that boomed in the coronavirus era faces the grim prospect of a recession.

The global games and services market is expected to contract 1.2% year-on-year to $188 billion in 2022, according to research by market data firm Ampere Analysis.

The sector grew by 26% from 2019 to 2021, reaching a record size of $191 billion. Video game sales have steadily increased since at least 2015, according to data from Ampere.

The game received a huge boost from the Covid-19 shutdowns in 2020 as people spent more time indoors. The launch of next-generation consoles from Microsoft and Sony in the same year also bolstered the fortunes of the industry.

However, the arrival of Microsoft’s Xbox Series X and S machines and Sony’s PlayStation 5 has proven to be a double-edged sword – logistical disruptions and shortages of vital components have meant buyers have great difficulty find one of the new consoles on store shelves or online.

Russia’s invasion of Ukraine – along with supply chain bottlenecks and rising inflation – have further worsened the game’s outlook. Many software and gaming hardware manufacturers have decided to suspend their activities in Russia, in particular Microsoft and Sony.

Russia was the world’s 10th largest gaming market in 2021, according to Ampere. But it is expected to fall to 14th place in the world rankings this year and lose $1.2 billion in value, the firm said.

Piers Harding-Rolls, research director at Ampere, said the figures show the games industry is not “recession proof”, with cost of living issues inflicted by higher prices. high likely to weigh on consumption.

“After two years of huge expansion, the games market is poised to return some of that growth in 2022 as multiple factors combine to undermine performance,” Harding-Rolls said.

“Even so, the year will end well ahead of pre-pandemic performance, and the outlook for the sector as a whole remains positive, with a return to growth expected in 2023,” he added.

The market is expected to return to growth in 2023, with sales expected to reach $195 billion, according to Ampere.

Other challenges facing the industry include Apple’s privacy changes that make it harder for mobile game developers to track iPhone users, as well as delays to hit releases like Starfield and Redfall. from Microsoft.

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