US consumer spending on video game products has fallen $1.78 billion in Q2, according to market research firm NPD. Overall, spending on video games in the US totaled $12.35 billion in the last quarter, down 13 percent year-on-year. The findings follow Microsoft and Sony reporting falling in-game revenue as pandemic growth slows.
Sony warned of a weaker PlayStation business earlier this week as gaming software sales plunged 26 percent year-on-year. Sony blamed the drop on a lack of big PlayStation titles this year compared to 2021 and less time spent gaming in general. Microsoft’s Xbox hardware revenue fell 11 percent year-on-year in the last quarter along with a 6 percent drop in Xbox content and services revenue and a 7 percent drop in overall gaming revenue.
Nintendo will report fiscal first-quarter earnings on Wednesday, but the company estimated earlier this year that it expects to sell 21 million Switch consoles for the fiscal year ending in March, down from 23.1 million the previous year.
While overall spending on games clearly declined across the industry in Q2, subscription content “was the only segment that posted positive gains,” according to NPD. That growth despite Sony launching a revamped PlayStation Plus subscription at the end of the quarter.
Hardware unit sales were led by the Nintendo Switch in the second quarter, according to NPD, with the PS5 making the highest dollar sales. Despite the decline in spending amid high inflation rates and following a period of heavy growth, “consumer spending continues to trend above pre-pandemic levels,” said Mat Piscatella, gaming industry analyst at NPD. “However, unpredictable and rapidly changing conditions may continue to affect markets in unpredictable ways in the coming quarters.”
