Circana Analyst Predicts 2% Decline in 2024 Game Spending

According to Circana analyst Mat Piscatella, the outlook for 2024 game spending is uncertain, with a potential decline of 2% being the most optimistic scenario. The industry is facing unprecedented uncertainty, with questions surrounding hardware and content releases. Piscatella notes that the success of games like Helldivers 2 and Palworld is crucial to offsetting the lack of major blockbusters, such as Grand Theft Auto 6, which is not expected until 2025. The absence of a Switch successor and limited first-party blockbusters from Sony also contribute to the uncertainty. Piscatella believes that the industry's reliance on mid-generation refreshes is not a reliable solution, as these typically only boost average selling prices rather than driving significant consumer growth. The shift from physical to digital media continues to impact retail, with brick-and-mortar stores facing challenges due to declining physical sales. However, Piscatella suggests that retailers can still participate in the success of digital games through gift cards and other initiatives. Despite the challenges, Piscatella remains optimistic about the industry's long-term prospects, predicting that 2025 will bring renewed growth driven by factors such as lower interest rates and the release of highly anticipated titles like Grand Theft Auto 6.