While the videogame industry continued to enjoy a pandemic boost in 2021, investors and analysts expect less in 2022, as continued semiconductor shortages and game delays combine with expectations that many will turn off the PlayStation and leave the house.
Chip shortages have especially been a pain for makers of videogame consoles, such as Sony Group Corp.’s
SONY,
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6758,
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PlayStation, Microsoft Corp.’s
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+0.21%
Xbox and Nintendo Co.’s
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Switch consoles. Lewis Ward, gaming research director at IDC, expects that part of the videogame industry to be a drag on growth: IDC expects console/TV spending to decline nearly 6%, to $62.75 billion in 2022.
Overall, Ward estimates worldwide gaming revenue will rise 11% to $251.39 billion in 2021, compared with 2020’s surge of 24% to $226.84 billion. While 11% is still pretty healthy growth, Ward also expects a more “dramatic” flattening in 2022, when he forecasts revenue of $256.43 billion, or only 2% growth.
A lot of that expected flattening has to do with the assumption that the worst of COVID-19 has passed, and that even with variants like delta and omicron popping up, stay-at-home conditions will not go back to what was seen in 2020 and early 2021.
“In my models and discussions with folks, we’re certainly thinking that life will return to something more normal, especially in countries where the vaccination rates are over 50%, 60%, 70%, 80% in some cases,” Ward told MarketWatch in an interview.
Also read: For the videogame industry to grow, it needs to first grow up
Ward said he expects “that there will be a return to normalcy and a substantial minority of the people that were first-time gamers go back to being non-gamers, and a substantial minority of the people who became much more intensive gamers will go back to spending their time and money doing other pursuits beyond gaming, that there will be something of a slowdown inherent in that.”
Games themselves will also be a big issue, as many major releases have faced delays, with no publisher wanting to experience the same fan and media heat as CD Projekt SA
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did after its bug-plagued 2020 release of “Cyberpunk 2077.” Publishers are more likely to keep updating their older games with fresh downloadable content to keep making money from previously successful releases.
“I think the biggest games in 2022 are going to be the biggest games from 2021, that were the biggest games from 2020,” NPD Group analyst Mat Piscatella said, citing …….
