Analysts expect Nintendo to release a successor to its popular Switch console in fiscal 2025.
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The latest report from market research company Newzoo shows that the annual growth of the global video game market will slow down this year due to weak sales of game consoles.
in a blog post Newzoo said in a report released on Tuesday that the gaming industry is expected to grow 2.1% annually to an estimated $187.7 billion.
That’s slightly lower than an earlier forecast in January, when the company said it expected the video game industry to grow 2.8% to $189.3 billion in 2024.
Newzoo said it expects almost half of game consumer spending in 2024 to come from the United States and China, with sales in the United States at $47 billion and China at $45 billion.
Although an improvement from last year’s 0.6% growth rate, the gaming industry’s growth rate has not reached the growth rate during the Covid-19 pandemic.
Nintendo Switch successor GTA 6 expected to launch in 2025
Michiel Buijsman, chief gaming market analyst at Newzoo, said that despite expected slow growth in 2024, next year is expected to be an important year for the gaming industry.
Newzoo predicts that console game revenue will decrease by 1% year-on-year this year. Sony said last week PlayStation 5 game console sales reach 2.4 million units The number in the fiscal first quarter was down from 3.3 million in the same period last year.
However, Buijsman said that by 2025, the growth of the console market “will likely return strongly.”
Major releases, including the successor to Nintendo’s flagship Switch console and new games in the popular Grand Theft Auto series, are expected to boost the industry’s prospects.
In May, Nintendo president Shuntaro Furukawa said the company expected to announce its The next Switch console in the fiscal year ending March 2025.
Meanwhile, Take-Two-owned Rockstar Games has pledged to launch its The highly anticipated Grand Theft Auto VI game will launch in fall 2025.
Analysts say these major releases could bring new energy to the gaming industry, which has struggled to reach the levels of growth of just a few years ago.
The game industry’s big reset
The gaming industry experienced huge growth between 2020 and 2021, with people spending more time indoors due to Covid-19 lockdowns.
However, the industry has faced a number of challenges recently, including weak spending, a shift in consumer habits from indoor to outdoor activities, and rising interest rates.
Starting in 2023 and lasting until 2024, the gaming industry has also seen massive layoffs around the world, with major studios laying off thousands of people.
Microsoft gaming division cuts 1,900 jobs JanuaryThe acquisition of Activision Blizzard was just three months away. A month later, Sony announced PlayStation division lays off 900 employees.
gaming software company unifiedAmazon’s live streaming service Twitch, mobile game publisher Playtika and social platform Discord also announced multiple rounds of layoffs.
Newzoo’s Buijsman said the main challenge for game studios this year will be “controlling costs in an overcrowded, increasingly consolidated market.”
He added that developers will face competition between free-to-play and pay-to-play games, as well as the use of generative artificial intelligence in game development, marketing and operations.
