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

According to a recent report by 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. However, the current figures are still 23% higher than those in 2019, prior to the pandemic. The surge in sales during the 2020 and 2021 lockdowns has been followed by a decline, with the market also experiencing a drop in spending towards the end of 2022. Ampere Analysis attributes this decline to the UK's economic situation and the growing cost of living crisis. The largest declines were seen in in-game monetisation, particularly in casual mobile titles. The mobile gaming market saw a 3% decline in sales to £1.66 billion. This decrease is attributed to younger and older gamers spending less time on games following the pandemic. Additionally, the new privacy rules implemented by Apple have disrupted the ability of app developers to target specific consumers through their marketing, posing a challenge for mobile developers. In the console space, the market declined by 1% to £2.89 billion in 2022, including DLC and in-game monetisation. The growth in subscription service revenue helped mitigate the decline. Without subscription services, the overall market would have experienced a 3.2% drop. Although subscription services saw a growth in revenue, there was a decline of 300,000 paying subscribers in 2022. The increase in spending can be attributed to higher-tier offerings from PlayStation and Nintendo, which come with a premium price point. The console space faced several challenges, including 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 lacks the high-end appeal of the Series X. In the PC gaming market, revenue declined by 1.2% to £815 million in 2022, considering all monetisation models. The number of premium PC games sold decreased, but this was offset by a higher average selling price due to the release of several AAA PC titles, including Spider-Man, God of War, and Monster Hunter Rise. As players spent less time gaming, online revenue saw a decline, although there were exceptions, such as Roblox, which has managed to retain its pandemic-driven growth by broadening its appeal to more age groups.