The Gaming Industry is Forecasted to Undergo its First Decline in Years; Newzoo Report
A recent report from Newzoo, a game, and esports data firm, predicts that the gaming industry will contract a bit in 2021. This slight decrease after exponential growth throughout the years is unique in Newzoo’s data.
Since 2012, the gaming industry has seen tremendous growth and enjoyed an upward trajectory. However, after so many years the gaming industry is forecasted to shrink a little.
It appears as surprising as well as worrying but no that much. Newzoo’s report suggests that the gaming industry is right on track to surpass $200 billion by 2023. There are certain reasons which led to a little bit of a decline i.e. a decline of 1.1%. In 2020, the gaming industry was standing at $177.8 billion but this year it is expected at $175.8 billion. The decline is small when compared to 2020, nevertheless, it was in 2020 that the gaming industry with help of several combinations of forces crossed everyone’s expectations. The global lockdown due to the pandemic spurred an all-time high global interest in gaming. In addition, the release of PS5 and Xbox Series S/X in the fourth quarter also sky-rocketed the gaming industry.
However, this year’s forecasted decline is due to the ongoing semiconductor chip shortage, Apple’s IDFA changes, and delayed launches of some big titles. Moreover, the global supply chain is facing a lot of disruption around the world due to the pandemic. The shortage in chips is causing a shortage of high-end graphics cards as well as the production of new consoles. Newzoo Report predicts that this will cause a decline of 2.8% in the PC games market and 8.9% for the console market.
From Newzoo’s predictions, it seems that there was a lot of frontloading in 2020 and this year will prove to be as a corrective year. Despite the forecasted decline, Newzoo is positive that the gaming industry will generate $204.6 billion in 2023. So more about this Newzoo report, you can find on their site.