Circana Analyst Predicts 2% Decline in 2024 Game Spending

According to Circana analyst Mat Piscatella, the most optimistic outlook for 2024 game spending is a 2% decline. However, if the situation takes a turn for the worse, the decline could be as high as 10%. The main reason for this uncertainty is the lack of clarity surrounding hardware and content releases. Piscatella notes that the two biggest games of the year so far, Helldivers 2 and Palworld, have performed well, but they may not be enough to offset the decline. The absence of major blockbusters, such as Grand Theft Auto 6, which is scheduled for 2025, and the potential delay of the Switch successor, may exacerbate the situation. Piscatella also expresses skepticism about the potential impact of mid-generation console refreshes, stating that they are more likely to boost average selling prices than drive significant sales growth. The shift from physical to digital media continues to pose challenges for gaming retail, with the decline of physical sales accelerating in the absence of new Nintendo hardware. However, Piscatella points out that gift cards for digital games like Fortnite and Roblox have shown significant growth, offering a potential lifeline for retailers. Circana has been tracking engagement data since 2020 to gain insights into player behavior, but Piscatella laments that the public focus remains on the traditional best-sellers list. The company faces challenges in tracking digital sales, particularly due to the lack of data from Nintendo and some other publishers. Despite these challenges, Piscatella remains optimistic about the industry's long-term prospects, citing the potential for growth in 2025 driven by factors such as declining interest rates and the release of highly anticipated titles like GTA 6.