According to market research firm NPD, US consumer spending on video game products fell by $1.78 billion in Q2. Overall, video gaming spending in the US totaled $12.35 billion in the most recent quarter, down 13 percent year over year. The findings follow both Microsoft and Sony reporting a decline in revenue in gaming as the growth of the pandemic slows.
Sony earlier this week warned of a weak PlayStation business as it saw game software sales fall 26 percent year over year. Sony attributed the slowdown to a lack of big PlayStation titles this year compared to 2021 and less time spent playing games in general. Microsoft’s Xbox hardware revenue declined 11 percent year over year in the most recent quarter, with Xbox content and services revenue down 6 percent and overall gaming revenue down 7 percent.
Nintendo is due to report its fiscal first-quarter earnings on Wednesday, but the company estimated earlier this year that it expects to sell 21 million Switch consoles for its fiscal year ending in March, which is expected to be the first of its kind. Last year was 23.1 million.
While overall spending on gaming clearly declined in Q2 across the industry, subscription content was “the only segment to post positive gains,” according to NPD. This increase is despite Sony launching its revised PlayStation Plus subscription at the end of the quarter.
According to NPD, hardware unit sales in the second quarter were led by the Nintendo Switch, with the PS5 selling the most dollars. “Consumer spending continues to run above pre-pandemic levels,” says Matt Piscatella, sports industry analyst at NPD, despite a high rate of inflation and a decline in spending after a major period of growth. “However, unpredictable and rapidly changing conditions may continue to impact the market in unpredictable ways in the coming quarters.”