Perhaps responding to economic uncertainty and narrowing job prospects, young people in the United States are significantly cutting back on spending on video games compared to this time last year. While 18- to 24-year-olds aren’t buying as much across a range of different categories, losses are concentrated in games.
New data published by market research firm Circana and reported by The Wall Street Journal suggests that young adults spent nearly 25% less on video game products in a four-week span in April than in the same timeframe last year. Other categories also dramatic drops: Accessories (down 18%), technology (down 14%), and furniture (down 12%). All categories combined, the 18-24 age group spent around 13% less than last year.
This decrease is not reflected among older cohorts, whose spending has been mostly stable year-over-year. The WSJ report suggests that the economic context could be driving young adults to pull back; a tighter labor market, increased economic uncertainty, and student-loan payments restarting all may be contributing to an environment hostile to the spending habits of 18- to 24-year-olds in particular.
This is potentially a warning indicator for the games industry, which has already been struggling under multiple rounds of layoffs and a reduction in revenue growth (despite often record-high profits). If they have an industry-wide impact, these spending cuts may disproportionately affect certain types of games; free-to-play behemoths like Roblox have been more popular than ever, even while conventional game developers have struggled.
