According to research firm NewZoo, the global video gaming market is expected to experience growth this year thanks to strong sales of Microsoft’s Xbox and Sony’s PlayStation 5 consoles. NewZoo forecasts that the market will grow by 2.8% to $189.3 billion in 2024, after a mere 0.6% growth last year. This signifies the end of a decline caused by the COVID-19 pandemic, which led to layoffs in several video gaming companies.
After two years of pandemic-driven growth, the video gaming market declined by 4.3% in 2022 due to high interest rates, persistent inflation, and a lack of major titles. However, there was an improvement in 2023, mainly due to the release of several major titles such as “Star Wars Jedi: Survivor” by Electronic Arts, “FC 24” – a soccer simulator, and “Hogwarts Legacy” by Warner Bros Discovery.
NewZoo notes that although this year may not see as spectacular a lineup of releases as in 2023, the sales of live-service games and titles from previous years will continue to drive console sales growth in 2024.
NewZoo’s predictions align with Sony’s expectations, as they anticipate selling 25 million units of their PlayStation 5 console within 12 months by March, mainly due to the release of a slimmer version of the device.
Live-service games, such as “Fortnite” by Epic Games, have been the primary source of revenue in the video gaming industry for years, thanks to their free-to-play model and regular content updates that attract a large user base and maintain their engagement. However, NewZoo’s research indicates that user engagement data from 2023 shows an increasing number of people shifting from live-service games to premium games.
The research firm also notes that the growth in popularity of gaming subscriptions, such as PlayStation Plus and Xbox Game Pass, where users pay a fee for access to a large number of titles, is expected to have a smaller increase this year.
“2024 should not be marked by major upheavals but rather continue what has already been observed recently,” said Romain Bingler, Market Strategy Manager at Ubisoft Entertainment, quoted in the report.
Source: Reuters
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