U.S. Video Game Market May See a 10% Decline This Year

The video game sector is poised for a difficult year, not just because of recent job cuts and the shutdown of studios. According to Circana, a market research company, there’s a possibility that game consumption in the United States could shrink by up to 10% this year. This adjustment is something physical stores will need to address.

Mat Piscatella, an analyst at Circana, suggests that the best-case scenario for U.S. game sales this year is a modest 2% reduction. However, darker forecasts predict a decline of as much as 10%. Either way, the industry is bracing for a tough nine months ahead, even if the optimistic outlook prevails.

Piscatella expresses concern over the unpredictability of this year’s game sales and production. “There’s uncertainty around the hardware. There’s uncertainty about the content. Who the hell’s making the games?” he asks. This uncertainty is amplified by the delay of high-profile titles such as Grand Theft Auto 6 to 2025, the postponement of Nintendo Switch 2 to next year, and Sony’s announcement of no major sequels for 2024, making the market’s trajectory unclear.

So far, the big hits of 2024, like Helldivers 2 and Palworld, have been surprises, providing a much-needed boost at the year’s start. Yet, they face competition from last year’s blockbuster, Hogwarts Legacy. “We’re in need of a game that can match or surpass Hogwarts Legacy’s impact from last year,” says Piscatella.

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He notes this year’s uncertainty as unprecedented in his experience since 2005, with the absence of major game announcements casting doubt on what will drive the industry forward. Physical stores, in particular, are expected to feel the impact in the coming months. Piscatella advises that physical retailers must adapt intelligently as the market shifts towards digital, especially without new Nintendo hardware this year.