Video game industry faces sluggish 2024 sales growth, Newzoo says

The global video game market is set for sluggish annual growth this year amid weak sales of gaming consoles, according to a new report from market research firm Newzoo.

In a blog post published Tuesday, Newzoo said the games industry is set to grow 2.1% year over year to an estimated $187.7 billion.

That is slightly down from an earlier January forecast in which the firm said it expects the video game industry to grow 2.8% to $189.3 billion in 2024.

Almost half of all consumer spending on games in 2024 is expected to come from the U.S. and China, Newzoo said, with the U.S. generating $47 billion of sales and China accounting for $45 billion.

Though it’s a step up from last year’s growth rate of 0.6%, the games industry isn’t experiencing the same growth rates it saw in the heady days of the Covid-19 pandemic.

Newzoo’s principal games market analyst, Michiel Buijsman, said despite the sluggish growth expected in 2024, next year is expected to be a major one for the gaming industry.

Console game revenues are expected to drop 1% year on year this year, according to Newzoo. Last week, Sony said it sold 2.4 million units of its PlayStation 5 console in the fiscal first quarter, down from 3.3 million in the same period a year ago.

However, in 2025, growth in the console market “will likely return with a bang,” according to Buijsman.

Major releases, including a successor to Nintendo’s flagship Switch console and a new game in the massively popular Grand Theft Auto franchise, are expected to boost the industry’s prospects.

In May, Nintendo President Shuntaro Furukawa said the company expects to announce the launch of its next Switch console in the fiscal year ended March 2025.

Meanwhile, Take-Two’s Rockstar Games has committed to launching its highly anticipated Grand Theft Auto VI game in fall 2025.

Analysts say those major releases could breathe new life into the games industry, which has struggled to match the kind of growth seen a few years ago.

Between 2020 and 2021, the games industry experienced huge growth, with people spending more time indoors because of Covid-19 lockdowns.

However, more recently, the industry has faced a number of challenges, including softer spending, a shift in consumer habits from indoor to more outdoor activities, and higher interest rates.

Beginning in 2023 and continuing into 2024, the gaming industry also had mass layoffs across the world, with major studios slashing thousands of jobs.

Microsoft cut 1,900 jobs in its gaming division in January, just three months after closing its acquisition of Activision Blizzard. A month later, Sony announced it was laying off 900 workers from its PlayStation unit.

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