Weak console sales forecast to slow down the growth of the video game industry in 2024, predicts research firm.

• The games industry is expected to grow by 2.1% annually to $187.7 billion, according to a recent report by market research firm Newzoo. This is lower than their earlier forecast of 2.8% year-over-year growth.
• Despite seeing a growth rate of 0.6% last year, the games industry is not experiencing the same growth rates as it did during the Covid-19 pandemic.
• The release of a new Switch console and GTA VI are predicted to improve the gaming industry's outlook in 2025, according to Newzoo.

Newzoo's market research report predicts that the global video game market will experience slow growth this year due to poor sales of gaming consoles.

The games industry is predicted to increase by 2.1% annually, reaching an estimated $187.7 billion, according to a blog post published Tuesday by Newzoo.

The video game industry is expected to grow slightly less than previously forecasted, with a projected growth rate of 2.8% to $189.3 billion in 2024.

In 2024, it is predicted that nearly half of global consumer spending on games will originate from the U.S. and China, with the U.S. contributing $47 billion in sales and China accounting for $45 billion.

Despite seeing a growth rate of 0.6% last year, the games industry is not experiencing the same growth rates as it did during the Covid-19 pandemic.

Nintendo Switch successor, GTA 6 expected in 2025

Despite the anticipated slow growth in 2024, the gaming industry is expected to experience significant growth in 2025, according to Newzoo's principal games market analyst, Michiel Buijsman.

Newzoo predicts that console game revenues will decline by 1% annually this year. Sony reported selling 2.4 million PlayStation 5 consoles in the fiscal first quarter, a decrease from 3.3 million units sold in the same period last year.

In 2025, the console market is predicted to experience significant growth, according to Buijsman.

The gaming industry is expected to improve with major releases such as a new Switch console and a Grand Theft Auto game.

Nintendo President Shuntaro Furukawa stated in May that the company anticipates revealing the release of its next Switch console during the fiscal year ending March 2025.

In fall 2025, Rockstar Games, a subsidiary of Take-Two, will release its highly anticipated Grand Theft Auto VI game.

The games industry could experience renewed growth due to the anticipated launch of major releases, according to analysts.

Games industry's big reset

The Covid-19 lockdowns caused a surge in the gaming industry's growth from 2020 to 2021 as individuals spent more time indoors.

Recently, the industry has faced challenges such as softer spending, a shift in consumer habits towards outdoor activities, and higher interest rates.

In 2023 and 2024, the gaming industry experienced mass layoffs worldwide, with major studios cutting thousands of jobs.

In January, Microsoft cut 1,900 jobs in its gaming division, while Sony announced layoffs of 900 workers from its PlayStation unit a month later.

The gaming software firm, Amazon-owned livestreaming service Twitch, mobile game publisher Playtika, and social platform Discord have also announced rounds of layoffs.

The main issue for game studios in 2021, according to Newzoo's Buijsman, is managing expenses in a highly competitive and concentrated industry.

Developers will face questions about competition between free-to-play games and premium releases, as well as the use of generative artificial intelligence in games development, marketing, and operations.