The US video game industry has endured a period of under-par growth in the aftermath of the pandemic. It however seems the industry is now turning the curve. The improved growth numbers of the industry have been driven mainly by improved hardware supply and blockbuster new games.

The US video game industry this decade began with a surge in players and investments. This was then disrupted by the COVID-19 pandemic which limited the influence of video games. This also coincided with the hardware supply constraints experienced in the market. There were also numerous game delays from the software aspect. The supply of new-generation hardware has added a fillip to the release of blockbuster games, coupled with enhanced player engagements. These factors have cascaded to stabilize the US video game industry after several months of yo-yo movement.

It is projected that the US video game market will achieve a 3% growth at the end of 2023. This translates to about $58.3 billion in revenue. New hardware products accounted for $7 billion of the total video game spending of $57 billion in the past 12 months. This translates to a year-on-year growth of 19%. The impressive improvement in hardware sales was driven by a surge in demand for the PlayStation 5 console in the market. The overall spending is marginally higher than the previous year and also 13% better than the pre-pandemic period up to July 2020. It is expected that the PlayStation 5 will remain relevant in the market until 2025.

Apart from PlayStation 5, the older consoles like PS4 and PS3 also had decent performances. Other consoles like Xbox (Series, One, and 360), as well as Switch also performed strongly this year. There is a reported shift in the consumer base for new video game hardware and this is driven by high-income households. Growth has also been recorded in digital full-game downloads which accounted for much of the growth in the segment.

Furthermore, sales in blockbuster new games may have offset declines in mobile spending. Subscription gaming services have also experienced a surge within the last 12 months. The outlook on the US video games market remains bright and we could see further growth in 2024.

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