Shulou(Shulou.com)11/24 Report--

It is reported that although the video game industry experienced an overall outbreak during the epidemic, it has recently suffered a contraction in demand, leading to questions about the ability of game companies to adapt to the economic downturn.

Game publishers such as Activision Blizzard and EA are not only plagued by rising prices and a shortage of blockbuster products, but also deal with supply shortages and consumers shifting direction of entertainment due to looser control of the epidemic.

Roblox, a gaming platform, reported on Tuesday that its revenue grew only 30 per cent in the latest quarter, down from 83 per cent two quarters ago. This proves once again the overall plight of the gaming industry.

Us consumers' spending on video games fell 11 per cent in June and is likely to fall 8.7 per cent for the whole of this year, according to analytics firm NPD.

Jesse Divinich, senior vice president of video game market research company Interpret, said: "the job market is still hot, there are a lot of bubbles in the economy, leading to higher inflation, and the relaxation of COVID-19 epidemic control also makes consumers start to think about going out to spend money to enjoy more experience."

Activision Blizzard's quarterly profit was lower than expected, and its competitors EA and Take-Two Interactive also warned of disappointing sales in the future.

"if 50% of the big bank economists say we could fall into recession in the next quarter or two, then my attitude is. We are in a recession, and. We see some signs of weakness." Take-Two CEO Straus Zelnick told analysts.

Console makers are not immune, for example, Xbox maker Microsoft's game revenue fell, while PlayStation maker Sony cut its forecast, and Nintendo also reported lower-than-expected sales.

Weak demand is a double whammy for companies that are already facing parts shortages.

Game chipmakers have also been affected by weak demand. AMD said its game graphics sales fell, while Nvidia suffered a 19 per cent month-on-month decline in revenue.

However, analysts and executives expect the industry as a whole to surpass pre-epidemic levels with the release of new games and the easing of component shortages.

Newzoo, a data company, expects the global gaming market to generate $196.8 billion in 2022, but growth will slow to 2.1 per cent from 7.6 per cent in 2021.

"Video games can't be left alone, but they do do well in difficult times." Said Steven Bailey, an analyst at Omdia, a market research firm. (book)

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