The video game industry is facing a decline not seen in 30 years

Despite major video game releases in 2023 and 2024, the gaming industry is in decline. Big players in the market are selling fewer consoles and layoffs at development studios are on the rise. Is the trend here to stay?

Players were able to immerse themselves in several high-quality titles in 2023. This year, the vintage will also be particularly good. The video game releases of 2024 should have an impact on the masses and this is already the case as the month of February is just drawing to a close.

However, even if players are having fun on PS5 as well as Switch and Xbox, the video game industry is in decline. Selling consoles like mobile games, After several years of rapid growth.

Video game industry decline: Sony, Microsoft and Nintendo are selling fewer consoles

Despite being worth over $200 billion, the video game industry is going through tough times. Recent comments from the biggest players in the market confirm this. While Sony planned to sell 25 million PS5s in the current fiscal year, the Japanese firm had to lower its target to 21 million units.

This will not be revised for the 2024 fiscal year, as Sony president Hiroki Totoki suggests. That PS5 sales are expected to decline gradually. Knowing that the PS5 won’t receive major exclusives from the cult license in 2024, this prediction is undoubtedly wise.

For its part, Microsoft has not explicitly announced the arrival of Xbox exclusives on PS5 and Nintendo Switch. As Phil Spencer explained, it’s a choice made both for the good of the players and the financial health of the company. The Xbox series still lags far behind the PS5 in terms of sales volume. The Nintendo Switch isn’t doing much better, as sales of the console have declined by 7.8% between April 2023 and December 2023.

Layoffs accelerate in the video game sector

Obviously, it is impossible not to mention the more than 9,000 people working in video games in 2023 who have lost their jobs. The trend is picking up fast this year. With 6,000 layoffs in January alone, including 1,900 in Microsoft’s gaming division. Note that consumer spending on mobile games has declined by 2% in 2023 and Data.ai predicts single-digit growth in 2024.

This “crisis” contrasts sharply with the growth recorded during the Covid-19 pandemic. At the time, the confinement imposed by the governments of many countries around the world allowed players to spend their time and money on video games.

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How will major industry players reverse the trend? SOne way might be to keep up with AAA’s growing budget and development time. Xbox and Sony are already considering taking this turn.

Will the service one day replace consoles, which are expensive to develop? For now, Microsoft wants to keep designing Xboxes, as Phil Spencer suggested last week. It’s hard to know what the industry will look like in a few years, but the simple success of video games selling millions of copies The market is no longer sufficient to do well.