UK Gaming Revenue Sees First Decline in a Decade, Despite Remaining Above Pre-Pandemic Levels

According to the latest report from Ampere Analysis, the UK's video game spending decreased by 1.6% to £5.38 billion in 2022. This decline marks the first for the UK market since 2012, yet the numbers remain 23% higher than pre-pandemic levels in 2019. The gaming industry had seen an artificial boost in sales during the 2020 and 2021 lockdowns. Beyond the post-lockdown decline, the UK market also witnessed a drop in spending towards the end of 2022, attributed to the country's economic situation and the growing cost of living crisis. The most significant declines occurred in in-game monetization, particularly affecting casual mobile titles. The mobile gaming market experienced a 3% decline in sales to £1.66 billion. Ampere's consumer research suggests that this decrease was driven by younger gamers (16-34 years old) and older gamers (55-64 years old) spending less time playing games after the pandemic. Mobile developers also faced challenges due to Apple's new privacy rules, which disrupted their ability to target specific consumers through marketing, especially affecting specialist titles and apps. In the console space, including DLC and in-game monetization, Ampere estimates that the market decreased by 1% in 2022 to £2.89 billion. However, the decline in spending would have been more pronounced without the growth in subscription service revenue. Excluding subscription services, the overall market would have dropped by 3.2%, according to the firm's estimates. Although subscription services saw revenue growth, they also faced challenges, including a decline of 300,000 paying subscribers in 2022. Nevertheless, overall spending increased due to higher-tier offerings from PlayStation and Nintendo, which commanded a premium price. The three major console players dominate the subscription service landscape in the UK and globally, with cloud streaming services accounting for only a small part of the market. Other challenges in the console space included a decline in Nintendo Switch sales as the platform ages, an irregular release schedule, delays in third-party games, and the limited availability of PS5 and Xbox Series X consoles. The Xbox Series S was the only readily available platform, but it lacks the high-end appeal of the Series X, according to Ampere. In the PC gaming sector, considering all monetization models, revenue decreased by 1.2% in 2022 to £815 million. Although the number of premium PC games sold declined, the average selling price increased, driven by the release of several AAA PC titles, including Spider-Man, God of War, and Monster Hunter Rise. In terms of online spending, as players spent less time gaming, revenue decreased. However, there were notable exceptions, with Roblox managing to retain its pandemic-driven growth, which Ampere attributes to its broadened appeal to various age groups.