Video game industry faces sluggish growth in 2024 amid weak console sales, research firm says

The global video game market is set for sluggish annual growth this year amid weak sales of gaming consoles, according to a new report from market research firm Newzoo.

In a blog post published Tuesday, Newzoo said the games industry is set to grow 2.1% year over year to an estimated $187.7 billion.

That is slightly down from an earlier January forecast in which the firm said it expects the video game industry to grow 2.8% to $189.3 billion in 2024.

Almost half of all consumer spending on games in 2024 is expected to come from the U.S. and China, Newzoo said, with the U.S. generating $47 billion of sales and China accounting for $45 billion.

Though it's a step up from last year's growth rate of 0.6%, the games industry isn't experiencing the same growth rates it saw in the heady days of the Covid-19 pandemic.

Newzoo's principal games market analyst, Michiel Buijsman, said despite the sluggish growth expected in 2024, next year is expected to be a major one for the gaming industry.

Console game revenues are expected to drop 1% year on year this year, according to Newzoo. Last week, Sony said it sold 2.4 million units of its PlayStation 5 console in the fiscal first quarter, down from 3.3 million in the same period a year ago.

However, in 2025, growth in the console market "will likely return with a bang," according to Buijsman.

Major releases, including a successor to Nintendo's flagship Switch console and a new game in the massively popular Grand Theft Auto franchise, are expected to boost the industry's prospects.

In May, Nintendo President Shuntaro Furukawa said the company expects to announce the launch of its next Switch console in the fiscal year ended March 2025.

Meanwhile, Take-Two's Rockstar Games has committed to