Market Analyst Predicts Video Game Revenue Will Drop in 2019, First Decline in 24 Years

Written by Stuart Thomas on Fri, Jan 25, 2019 12:36 PM
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Total gaming revenue could be set to decline this year according to a market analyst. If true, it would be the first time video games revenues have declined year-on-year since 1995.

Video games have enjoyed 24 straight years of unprecedented growth. From fairly niche beginnings, video gaming is now the most popular form of entertainment on the planet in terms of global spend. However, after a quarter of a century, it could be hitting its first speed bump. Pelham Smithers, from market research firm Pelham Smithers  Associates, believes total video game sales will drop by 1% in 2019 compared to 2018.

Have on fear though as Smithers believes games will still rake in an estimated $136.5 billion. The actual drop is comparatively tiny, shrinking by $1.36 billion compared to 2018, but its significance is in being the first drop in 25 years.

So why would this happen? Well, there are a few big reasons. Firstly, China has been cracking down hard on video game approvals. There have been no new games approved for release in China in the last nine months. China accounts for 18.4% if the world’s population and this has a potentially huge impact on game sales. Secondly, Smithers believes Fortnite’s popularity has peaked and interest could be waning. It’s difficult to gauge this but it does certainly feel as if Fortnite has no higher to go at this point.

Smithers third and final reason is the lack of blockbuster releases in 2019. This time last year we had a giant like Red Dead Redemption 2 to look forward to. We had God of War. We had Spider-Man. Before that, we had The Legend of Zelda: Breath of the wild. There aren’t really any of these types of games to look forward to in 2019, at least for now. There’s the slim chance we could get The Last of Us 2 of course, and we may be surprised by Star Wars Jedi or some unannounced titles, but for the most part, 2019 is looking like a fairly muted year for massive AAA titles.

Looking further afield, Smithers believes this decline will stretch into 2020, claiming the plummeting value of the likes of EA and Activision could contribute to a contraction.

What are your thoughts, do you think we could actually some massive games launching in 2019? Or are we set for a muted year ahead of blockbusters like Cyberpunk 2077, The Last of us Part 2 and Death Stranding in 2020? Let us know what you think below!

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15:10 Jan-28-2019

Never bought a single game since early 2017. have a 30+ games library and haven't played 1/4th of them. yet.

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22:40 Jan-28-2019

I know the feeling.

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07:53 Jan-26-2019

The market is now literally saturated with average overpriced games. Loot crates and micro transactions have watered down the experience to. I also applaud Nintendo for restarting Metroid, the industry needs quality not quantity now.

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20:53 Jan-25-2019

Nothing can just grow forever, just ask World of Warcraft... :-D But on more serious note, yeah, sounds reasonable. I feel also pushing microtransactions to the limit did part of the harm. As well as fatigue, with so many releases coming out annually, just to squeeze as much as possible out of us.

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20:55 Jan-25-2019

Plus not to mention those huge libraries of games people bought, never completed or even never played, which are just sitting there. I feel like greed is finally catching up and starting to contribute to next video game crash. Might not be same, but hopefully it will burn big greedy AAA publishers.

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20:57 Jan-25-2019

Wouldn't mind if we get more good indie developers and "smaller" studios, like Larian or not so small anymore, Projekt Red. And have less of EA, Activison and company... I wouldn't mind if those move out of the industry and go mobile only.

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19:55 Jan-25-2019

Yup, and you know who's going to get blamed when it does? It's not going to be the investors that push for exponential growth and nothing less, and it's sure wont' be the people at the top abuse that their employees and customers to insure that exponential growth, nope, it's going to be the customer. Those crappy "man baby" under-monetized toxically masculine customers who just won't open their wallets wide enough to sate the glutinous monster that is the AAA game industry.

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16:54 Jan-25-2019

There mentioned reasons are sounds. Will have the predicted impact, is another matter entirely.

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15:08 Jan-25-2019

Predict away....... We shall see....

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13:11 Jan-25-2019

I mean after the behemoth that is Fortnite (whatever our thoughts on the game may be). On top of various top AAA games, and other money making battle royale games, I think it kind of makes sense for revenue to drop next year

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12:59 Jan-25-2019

Cyberpunk will come in Q4 '19, we will get release date on E3.

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