The video game industry could use a power-up

While the movie and music industries are celebrating highs they haven't seen in years, the gaming industry is on a downward tilt, as smaller game developers struggle to find footing. Analysts expect the video game industry to contract anywhere from 2%-10% in 2024.

What’s going on? Widespread lay-offs and studio closures that plagued gaming companies last year have continued into 2024, while the rush of investment following the Covid gaming boom has slowed down.

The market is also getting increasingly saturated, making it difficult for new titles to stand out. This year, 14,000+ games were published on Steam, the leading PC gaming store, outpacing 2023's tally by thousands.

Publishing into the void

Despite all the new releases, gamers tend to gravitate towards familiar favorites – not entirely unlike scrolling through all the new content on streaming platforms only to end up rewatching The Office for the 500th time.

• 92% of all playtime last year went to old games or annual editions of recurring series (like Call of Duty or Madden), according to analytics firm Newzoo.
• This means just 8% of gamers’ time was spent playing new, non-annualized games.

But…Some analysts say there’s still room within the industry for new games with novel and fun concepts to thrive, with game development tools becoming more accessible and opening the door to smaller production teams. Many of gaming’s biggest success stories in 2024 – including deck-building poker roguelike Balatro, multiplayer shooter Helldivers II, and "Pokémon with guns" Palworld – were earned with a fresh and interesting idea.

👀 Looking ahead: The launch of a successor to Nintendo’s flagship Switch console and the release of Grand Theft Auto VI (whenever it finally comes out) are expected to boost the industry’s bottom line in 2025.