According to new projections, 2022 could be an historically weak year for growth in video game sales. That follows two years of breakout revenues for console, PC, and mobile gaming, but persistent supply chain issues and economic headwinds that have built up throughout that period now appear ready to bite the industry.
For example, perpetual shortages of the latest Xbox and PlayStation consoles may now be feeding into weaker game sales designed for those hardware devices. Additionally, declining sales of PC and smartphone units have coincided with a slowdown in revenues derived from games and other conent released on those platforms.
Related ETF: Wedbush ETFMG Video Game Tech ETF (GAMR)
For the first time in Newzoo’s history of covering the global games market, VentureBeat reports the market researcher has revised its forecast downward to project video game revenues will decline -4.3% in 2022 to $184.4 billion. A separate report from the NPD Group found that consumer spending on video gaming in the US totaled just $12.34 billion in the third quarter, a decline of -5.0% YoY.
While these projections are only a moderate setback, following two breakout years in 2020 and 2021 that sold well above forecasts due to lockdowns and large payouts of financial assistance during the COVID-19 pandemic, there is a growing risk that the decline in gaming revenues could be the latest symptom of a broader, more concerning slowdown in consumer spending.
Though the pandemic boosted sales on higher prices for gaming developers and manufacturers, rampant supply chain issues have made acquiring the latest consoles a difficult and expensive task. In fact, MRP has been highlighting the significant impact of the global chip shortage on hardware output since the latest Xbox and PlayStation consoles, manufactured by Microsoft and Sony, respectively, were released in late 2020.
To this day, Sony is still trying to increase their output of PlayStations to meet demand. As part of the company’s Q2 earnings call, Executive Deputy President and CFO Hiroki Totoki noted that, as of September…
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