Microsoft, Sony and Nintendo each reported a fall in quarterly video game sales. The main reason? People are spending less time playing and more time going out.
The giants of the video game world saw their sales slide in the second quarter, as initial tailwinds from the Covid pandemic faded.
In the three months ended June, Microsoft, Sony and Nintendo each posted disappointing results in their respective gaming businesses.
The numbers reflect a broader contraction in consumer spending on video games. Americans spent $12.4 billion on games in the second quarter, according to market research firm NPD, down 13% year-on-year.
Several factors are to blame, not least the relaxing of pandemic restrictions, with people eschewing home entertainment options in favor of outdoor activities.
Ongoing shortages of semiconductor equipment haven’t helped either.
« The growth of the overall game market has recently decelerated as opportunities have increased for users to get out of [the] home as Covid-19 infections have subsided in key markets, » Hiroki Totoki, Sony’s chief financial officer, said on the company’s earnings call last month.
Sony reported a 2% decline in sales year-on-year at its gaming unit in the June quarter, while operating profits plunged almost 37%. The company also issued a gloomy outlook, cutting its full-year profit forecast by 16%.
The main reason? People are spending less time playing games and more time going out.
Total gameplay time among the PlayStation player base was down 15%, much lower than initially forecast by the company.’Covid effect’ disappears
Gaming was one of the big beneficiaries of the Covid pandemic, with publishers experiencing bumper growth as consumers spent more time indoors.
But with consumers’ spending habits shifting post-lockdown, and inflation running hot, the industry is taking a hit.
At Microsoft, overall gaming revenues sank 7% year-on-year. Sales of the company’s Xbox consoles declined 11%, while gaming content and services revenues dipped 6%.
