Black Friday Set to Be a Game-Changer for Video Game Consoles

Despite a strong year for video game console sales, with significant growth in major markets, there are underlying concerns. The PS5 has seen a substantial increase in sales, particularly in Europe, with some countries experiencing over 100% growth. However, this is partly due to pent-up demand caused by stock shortages in 2022. The Nintendo Switch has also seen impressive growth, but this is mostly limited to Japan and other export territories, with sales declining in the US and Europe. Xbox, on the other hand, has had a challenging year, with declining sales in most major markets. According to GfK, the PS5 has a 43% share of the UK console market over the last 12 months, rising to 51% over the last six months. The Xbox Series consoles have seen a decline in market share, from 26% to 23%, while the Switch has dropped from 34% to 25%. This Black Friday will be the first time all three current consoles are in full supply, making it a crucial period for the platform holders. Nintendo is focusing on the Standard and Lite Switch models, with bundle offers, while PlayStation is launching a new, smaller PS5 model and bundles with popular games. With consumer confidence low due to the high cost of living, platform holders will need to balance their pricing strategies to avoid eroding margins. GfK warns that the entertainment sector should be cautious, with the consumer confidence index falling and the major purchase index declining, indicating that consumers will be careful with their spending on big-ticket items like consoles.