The State of Video Gaming in 2025
The State of Video Gaming in 2025
The State of Video Gaming in 2025
@ballmatthew3 weeks ago


From 2011 to 2021, video gaming soared. Spending grew at over twice the rate of


Gaming's 2011-2021 growth didnt just beat its historical averages; it significantly outpaced global growth benchmarks (e.g. 3.4x the rate of world real GDP)


Though a few anticipated a slowdown or even a pullback after COVID; most expected that gaming's growth would continue at high rates if not accelerate


Instead, spend fell by ~3.5% in 2022, then barely grew in 2023 & 2024, finishing flat over 3 years and thus short tens of billions in revenue versus forecasts


This decline occurred despite the end of consolelGPU shortages in mid-2022, and in 2023, arguably the best content release slate in the industry's 7O-year history
Earl


A post-pandemic pullback is an insufficient explanation for gaming's contraction


And so not only does the video gaming industry now fall short of global growth benchmarks; its actually shrinking in real terms down roughly 13% since 2021


Its not just spend that is declining players are too. Average playtime has partly recovered, but this is mostly because less engaged players stopped playing entirely



vs. 2021) has led to an unprecedented number of commercial disappointments or flops

titles, having lost faith in the business cases they had approved only a few years ago
Take-Two says cancelled games weren't 'core franchise' titles
THE PUBLISHER'S RELEASE SLATE HAS DROPPED BY 12 TITLES, FOLLOWING GAME CANCELLATIONS
People Can Fly lays off more than 120 employees as it cuts back on in-development games: 'We need to tailor our plans to our financial capacity'

Paradox cancels life sim Life by CEO says they gave the studio 'a fair shot' but now 'believe it is better to stop' You,
far too long and uncertain" to continue:.
And VC content funding has plummeted, too, falling 77% from H221-H1*22 highs


The collapse in venture investment dollars comes not just from smaller average investment rounds, but also far fewer rounds and from far fewer investors


Many of the independent studios founded since 2019 are now closing because they cant find the VC or publisher funding needed to finish their games

4,315 followers
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Jar of Sparks

Earlier today, we notified our team that Jar of Sparks will be halting work on our current title as we search for a new publishing partner who can help our innovative team took bold risks and pushed boundaries; striving to create something truly new and exciting for the industry: We couldn't be prouder of the groundwork we've laid together. bring
Deviation Games Is Shut Down Before It Can Ship a Game


Humanoid Origin

Earlier today; we informed our staff that Humanoid Origin will be shutting down: Despite efforts to shield the studio from broader challenges in the industry; an unexpected shortfall of funding left us unable to sustain operations:

Worlds Untold
4,273 followers

Its hard to find the right words for this, but wanted to share that we've made the very difficult decision to pause operations at Worlds Untold while we search for a new partner to help bring our vision to life. This was not a decision we made lightly ~it's been a deeply personal journey; and we' re all so proud of everything this team has built together.
All Events Orphan Age Events
The Sea is Quiet
Ahoy mateys,
Dropping the nautical jargon for clarity; the last few months we've been going through bankruptcy procedures in France. This started when communication broke down between us and our publisher; leading to payments not continuing. Alas, with our publisher not continuing funding and no other sources effective immediately: (Like at the end of the work today we cannot legally continue working ) day

Employees have been hit hard, suffering back-to-back-to-back record layoffs.


And what gamemakers need is growth. Gaming stocks have underperformed the


And behind the headline layoffs there is still meaningful hiring: Most publishers will have more employees in 2025 than in 2022 even net of acquisitions



GG No industry has a 'right to grow several times faster than global real GDP _ let alone for a decade. Gaming achieved it through several concurrent growth engines


These several growth engines grew the video gaming industry's players + playtime spend, while strengthening network effects and often amplifying one another


Nearly all of the top games of the last 15 years have taken advantage of several growth engines simultaneously: Many pioneered them outright.


Yet the old growth engines are mostly exhausted. There are few high-value mobile


And the many would-be growth engines have to drive real revenue or player growth let alone generate new market leaders yet



With video gaming's growth engines slowing; its less surprising that participation;


Meanwhile; the industry is facing many new challenges challenges have intensified



Gaming's growth is driven by mobiles growth the form factor is over two thirds of new spend since 2011 and is now 55% of the total market; up from 32%


The iPhone led to billions of new players and hours. But after 18 years, growth now relies on population growth and smartphone adoption in (very) low ARPU markets


Social video is devouring mobile-based leisure time: U.S. adults spend 35MM more hours a watching TikTok than in H2*20/H1*21 (peak of mobile gaming spend) day


And TikToks growth hasn't cannibalized other social video platforms U.S. adults have grown their use of the category by over 100 million hours a since 2020/21 day


â â â ad revenue fall UA is even costlier install volumes go down more, etc. cycle:



IDFA and social video have led mobile gaming to lose 2.6 percentage points of its


After three years; global mobile gaming spending remains down 8% from their (23% after inflation). The competitive consequences are even greater_ peak


As mobile discovery; downloads; and revenues stagnated, competition ossified. The top 3 titles in the U.S. by genre are 400/ of revenue; titles 2+ years old are 70%


Consider that the biggest new 11 months but also spent $5OOMM on user acquisition (or 36% of net revenue) game


Or that while the number of smartphone owners has tripled since 2014 (1.5B to 4.5B), as has mobile gaming spend ($35B to $105B), there are fewer mobile games


Even Call of Duty is struggling to launch new mobile titles. 2024s Warzone has only 300 of the downloads of 2019s Mobile after 9 months and 5% of the spend


Yet this exemplifies the stickiness of aged titles versus newer; "better" substitutes


from mobile game developers, are facing renewed scrutiny over their commissions and policies year


Take Roblox; the top mobile ever. For every $100 in player spend, Roblox pays app stores $22 (a sum thats nearly all profit for ApplelGoogle) and loses $35 game

