PlayStation 5 logo at a store in Krakow, Poland.
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Video game sales will decline annually for the first time in years as another industry that flourished in the era of the coronavirus faces the bleak prospect of a recession.
The global games and services market is forecast to contract by 1.2% year on year to $188 billion in 2022, according to research from market data firm Ampere Analysis.
The sector expanded 26% from 2019 to 2021, hitting a record $191 billion. According to Ampere, video game sales have been steadily rising since at least 2015.
Games have received a huge boost due to the 2020 Covid-19 shutdown as people have been spending more time indoors. Launch of next generation consoles from Microsoft as well as Sony the same year also strengthened the state of the industry.
However, the introduction of Microsoft’s Xbox Series X and S computers and Sony’s PlayStation 5 proved to be something of a double-edged sword, with logistics disruptions and shortages of vital components leading to buyers having a hard time finding any of the new consoles on the market. store shelves. online.
The Russian invasion of Ukraine, along with supply chain bottlenecks and rising inflation, has further hurt the gaming outlook. Numerous manufacturers of gaming software and hardware decided to suspend their activities in Russia, including Microsoft and Sony.
In 2021, Russia was the 10th largest gaming market in the world, according to Ampere. But it is expected to fall to #1. The company said it ranked 14th globally this year and lost $1.2 billion in value.
Piers Harding-Rolls, director of research at Ampere, said the numbers show the gaming industry is not “recession-proof” and cost-of-living problems caused by higher prices are likely to weigh on consumption.
“After two years of huge expansion, the gaming market is poised to ease that growth slightly in 2022 as several factors combine to reduce performance,” Harding-Rolls said.
“However, the year will end much earlier than before the pandemic and the outlook for the sector as a whole remains positive, with growth projected to return in 2023,” he added.
The market is expected to return to growth in 2023 with sales reaching $195 billion, according to Ampere.
Other challenges facing the industry include privacy changes from Apple this makes it harder for mobile game developers to keep track of iPhone users, as well as delays in blockbuster releases like Microsoft’s Starfield and Redfall.