A Paradox in the Gaming Industry

The gaming equipment market, once a booming sector, is experiencing a significant slowdown. After several years of rapid growth fueled by the pandemic, the industry is now facing a challenging landscape. 

The gaming industry is facing an intriguing paradox. While the number of gamers is skyrocketing, there's a concurrent decline in spending on gaming equipment. This discrepancy is a significant challenge for the industry.

Potential Reasons for the Decline in Gaming Equipment Spending:

# Shift towards Digital Gaming: The rise of digital platforms and subscription services has made gaming more accessible, reducing the need for physical consoles and games.

# Economic Factors:Rising costs of living and economic uncertainties might be influencing consumer spending habits, with gaming equipment being considered a discretionary expense.

# Increased Competition: The intensifying competition in the gaming market, with more free-to-play games and mobile gaming options, could be diverting consumer spending.

# Hardware Lifecycle Extension: The lifespan of gaming consoles and PCs has increased, leading to less frequent upgrades.

The global gaming industry is expected to reach over 1.3 billion users this year, 91 million more than in 2023 and almost twice the figure reported in 2017. Although the number of gamers continues to rise, this massive user base seems to be spending less and less on gaming equipment, and this negative trend will continue in the following years.

According to data presented by Stocklytics, the annual growth rate in the gaming equipment market is expected to halve and drop to only 1.7 per cent by 2029.

According to a Statista Market Insight survey, global gaming equipment sales saw double-digit growth between 2019 and 2022, rising by an average of 15 per cent annually. Statistics show that 2020 and 2021 were undoubtedly the best years for selling gaming consoles and VR headsets, with revenues increasing by 23 per cent and almost 17 per cent, respectively. However, it was downhill from there.

After slipping to 5 per cent in 2023, the annual growth rate in the gaming equipment segment is forecasted to drop to 3.6 per cent in 2024, showing a sixfold decrease since 2021. This negative trend will continue in the following years. Statista expects the annual growth rate to drop to only 1.7 per cent by 2029, only half the figure expected this year and 13 times less than at the market peak. This modest growth will help the market revenue increase by only 11 per cent or $4 billion (€3.7bn) in the next five years, compared to 88 per cent increase in the past six years.