Slower Growth in Gaming Revenue Amid Decreasing Playtime: Newzoo

According to a report by research firm Newzoo, the growth of revenue in the personal computing and console gaming sectors is projected to lag behind pre-pandemic levels until 2026, primarily due to a decline in gamers’ playtime.
Free Fire online gameThe market is anticipated to expand by 2.7 percent from the end of 2023 to 2026, significantly lower than the 7.2 percent growth rate observed from 2015 to 2021. This slowdown is attributed to a decrease in the average quarterly playtime, which plummeted by 26 percent from 2021 to 2023.

This trend is expected to persist in the current year, with Gaming playtime dropping by approximately 10 percent in January alone, mainly due to a weaker schedule of gaming releases.

Newzoo highlighted the impact of slower player growth rates on the industry’s ability to achieve net organic growth. This sentiment aligns with Sony Group’s announcement in February that it doesn’t anticipate releasing any major franchise titles like “God of War” and “Marvel’s Spider-Man” in the upcoming fiscal year. The company also revised its full-year sales forecast for PlayStation 5 consoles downward due to underwhelming holiday season sales.

Moreover, industry behemoths such as Sony, Tencent Holdings’ Riot Games, and Electronic Arts have undertaken significant layoffs and operational cutbacks this year, underscoring the challenging landscape facing the gaming sector.

The report sheds light on the trend of gaming industry consolidation, with fewer publishers capturing a larger share of player engagement. In 2023, between 28 and 34 publishers accounted for 80 percent of monthly active users, a decline from previous years. Meanwhile, a handful of popular titles like Epic Games’ “Fortnite,” “Roblox,” “League of Legends,” “Minecraft,” and “Grand Theft Auto V” dominated 27 percent of all playtime last year.

Fortnite and Roblox have particularly thrived due to their games-as-a-platform model, which allows for continuous content updates and user-generated content, enabling these platforms to maintain their relevance and stay ahead in the competitive landscape, the report said.

InfotechLead.com News Desk

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