A COVID hangover plagues the video game industry

A COVID hangover plagues the video game industry

A COVID hangover plagues the video game industry

 

Not even a bottle of Pedialyte and a bacon, egg, and cheese breakfast will cure the COVID hangover the video game industry is currently experiencing. Game sales have grown rapidly throughout the pandemic, but have now started to decline.

Two of the world’s largest games companies, Microsoft (MSFT) and Sony (SONY), both revealed this week that their games businesses have seen year-on-year revenue declines as inflation increasing weighs on the sector. Sales of more than games and hardware are suffering.

Compared to the previous year, players are also playing less frequently. Usage of Xbox Live and PlayStation Plus, the two companies’ respective online gaming services, has declined, according to Microsoft and Sony.
How severe is the decline? NPD reports that June US spending on gaming hardware, content and accessories fell 11% from the same month last year to $4.3 billion. Even still, pre-pandemic levels, when the NDP announced that June US spending totaled $959 million in 2019, are significantly higher than those levels.

No, the video game industry is not on its way out. However, after growing so rapidly during the pandemic, it must now prepare for a painful return to normal.

Fewer games are purchased by players.

Both Microsoft and Sony reported lower game software sales in their final quarters compared to 2021. Microsoft reported that lower engagement and monetization of first-party and third-party games led to a 6 % year-over-year of content and services revenue.
The company doesn’t provide exact sales figures for games and hardware, but it did report that its More Personal Computing segment, which includes Windows sales and advertising revenue as well as Xbox-related sales, declined. 2% per year to $14.4 billion.

Not even a bottle of Pedialyte and a bacon, egg, and cheese breakfast will cure the COVID hangover the video game industry is currently experiencing. Game sales have grown rapidly throughout the pandemic, but have now started to decline.

Two of the world’s largest games companies, Microsoft (MSFT) and Sony (SONY), both revealed this week that their games businesses have seen year-on-year revenue declines as inflation growth imposed on the sector. Sales of more than likely games and hardware.
Compared to the previous year, players are also playing less frequently. Usage of Xbox Live and PlayStation Plus, the two companies’ respective online gaming services, has declined, according to Microsoft and Sony.
How severe is the decline? NPD reports that June US spending on gaming hardware, content and accessories fell 11% from the same month last year to $4.3 billion. Even still, pre-pandemic levels, when the NDP announced that June US spending totaled $959 million in 2019, are significantly higher than those levels.

No, the video game industry is not on its way out. However, after growing so rapidly during the pandemic, it must now prepare for a painful return to normal.

Fewer games are purchased by players.

Both Microsoft and Sony reported lower game software sales in their final quarters compared to 2021. Microsoft reported that lower engagement and monetization of first-party and third-party games led to a 6 % year-over-year of content and services revenue.
The company doesn’t provide exact sales figures for games and hardware, but it did report that its More Personal Computing segment, which includes Windows sales and advertising revenue as well as Xbox-related sales, declined. 2% per year to $14.4 billion.