Video game sales are expected to fall annually for the first time in years, as the industry that thrived during the coronavirus period confronts the bleak possibility of a recession.
According to market research firm Ampere Analysis, the worldwide games and services industry is expected to shrink 1.2 percent year-on-year to $188 billion in 2022, CNBC reported.
From 2019 to 2021, the sector increased by 26 percent, reaching a staggering $191 billion. Ampere data shows that video game sales have been steadily increasing since 2015.
COVID-19 shutdowns in 2020 boosted gaming significantly as people spent more time indoors. The release of next-generation consoles from Microsoft and Sony the same year boosted the industry's fortunes, the CNBC report further said.
However, the advent of Microsoft's Xbox Series X, S Machines and Sony's PlayStation 5, proved to be a double-edged sword. Due to the logistics problems and shortages of critical components during COVID-19 pandemic, the difficulty level increased for the customers to find any of the new consoles in stores or online.
COVID-19 shutdowns made it impossible for customers to purchase product physically from stores or they were also not available for delivery. Due to the pandemic, offline stores were also closed, which became the primary reason of decline in sales.
As per Ampere, Russia was the world's tenth-largest games market in 2021. However, the business predicts that it will fall to 14th in the worldwide rankings this year, losing $1.2 billion in value.
Russia's invasion of Ukraine, along with supply chain bottlenecks and rising prices, has increased the concerns of the gaming industry. Many gaming software and hardware companies, including Microsoft and Sony, have opted to terminate operations in Russia.
According to Ampere, the market will return to growth in 2023, with sales estimated to reach $195 billion.