Tuesday, August 9, 2022

US video game spending fell 13 percent in Q2, says NPD

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According to market research firm NPD, U.S. consumer spending on video game products fell $1.78 billion in the second quarter. Overall, video game spending in the US was $12.35 billion in the quarter, down 13 percent year-on-year. The findings follow both Microsoft and Sony reporting revenue declines in gaming as the pandemic growth slows.

Earlier this week, Sony warned of a weaker PlayStation business as game software sales fell 26 percent year over year. Sony blames the slump on a lack of major PlayStation titles this year compared to 2021 and less time spent playing games in general. Microsoft’s Xbox hardware revenues declined 11 percent year-over-year in the quarter, in addition to a 6 percent decline in Xbox content and services revenues and a 7 percent decline in overall gaming revenues.

Nintendo will release its fiscal first quarter results on Wednesday, but the company forecast earlier this year that it expects to sell 21 million Switch consoles for the fiscal year ended March, up from 23.1 million a year earlier.

While overall gaming spending fell markedly in the industry in the second quarter, subscription content was “the only segment to see positive gains,” according to NPD. That growth is despite Sony launching its revamped PlayStation Plus subscriptions at the end of the quarter.

Hardware unit sales were led by Nintendo Switch in the second quarter, according to NPD, with the PS5 generating the highest dollar sales. Despite the decline in spending amid high inflation and after a major period of growth, “consumer spending continues to rise above pre-pandemic levels,” said Mat Piscatella, a gaming industry analyst at NPD. “However, unpredictable and rapidly changing conditions could continue to affect the market in unexpected ways in the coming quarters.”

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