Console and personal computing (PC) gaming revenue is expected to remain below pre-pandemic levels until the end of 2026, according to gaming research company Newzoo. 

Gamers are reportedly recording fewer hours of game time, as quarterly playtime fell 26% from 2021 to 2023, according to a report from the company. 

“Slower player growth rates will impact the industry’s capacity to ‘expand the pie’ via net organic growth,” Newzoo said.

The lack of PC and console playtime is expected to continue throughout 2024 due to a weaker slew of gaming release schedules, according to the report.

The once “recession-proof” video game industry witnessed a rare decrease in user growth as the world manoeuvred itself out of the coronavirus pandemic in 2022.

The industry was also hindered by rising inflation, which led to a decrease in customer spending. Semiconductor shortages also led to a slowdown in the supply of gaming consoles.

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Leading gaming companies were also affected by regulations throughout 2022. For example, China froze approvals for new game releases for nine months as part of an overall crackdown on the gaming industry.

In addition, India’s ban on video games, which was imposed due to data privacy and national security, disrupted the overall growth of the industry.

In 2024, the gaming industry suffered a flurry of layoffs from leading publishers.

Sony and Microsoft, makers of the Playsation and Xbox, have laid off hundreds of employees so far this year. The Japanese Playsation-maker also cut its full-year sales forecast for its PlayStation 5 console due to disappointing holiday season sales.

Despite the slowdown, the gaming industry will be worth a whopping $470bn in less than a decade, increasing by more than double from its 2021 $197bn valuation, according to research and analysis company GlobalData.