October 4, 2022

US consumer spending on video game products fell by $1.78 billion in the second quarter, according to market research firm NPD. Overall, U.S. video game spending totaled $12.35 billion in the most recent quarter, down 13% year over year. The findings follow Microsoft and Sony reporting a decline in gaming revenue as the pandemic slows.

Sony warned of a weaker PlayStation business earlier this week as it saw game software sales fall 26% year-on-year. Sony blamed the drop on a lack of major PlayStation titles this year compared to 2021 and less time spent on games in general. Microsoft’s Xbox hardware revenue fell 11 percent year-over-year in the latest quarter, alongside a 6 percent drop in revenue from Xbox content and services and a 7 percent decline in overall game revenue.

Nintendo is set to report its first-quarter financial earnings on Wednesday, but the company predicted earlier this year that it expected to sell 21 million Switch consoles for the fiscal year that ended in March, up from 23.1 million a year earlier.

While overall gaming spending has clearly declined across the industry in the second quarter, subscription content “was the only segment to post positive gains,” according to NPD. This growth comes despite Sony rolling out its revamped PlayStation Plus subscriptions at the end of the quarter.

The Nintendo Switch led hardware unit sales in the second quarter, according to NPD, with the PS5 generating the highest dollar sales. Despite spending cuts amid high inflation and after a long period of growth, “consumer spending continues to move above pre-pandemic levels,” says Mat Piscatella, toy industry analyst at NPD. “However, unpredictable and rapidly changing conditions may continue to affect the market in unexpected ways in the coming quarters.”

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