Video game developers are struggling to recover from a spate of major titles that have been pulled from stores in recent months.
The industry, meanwhile, has been plagued by persistent shortages of digital goods and games and concerns over the possibility of a long-term slowdown in sales, which is pushing consumers to seek out other ways to spend their cash.
Analysts at the gaming data company NPD Group said last week that video game sales were down 12% in the second quarter of this year, the steepest decline since 2013.
As a result, the industry is expected to miss a key target of 20 million digital downloads by the end of the year, NPD said, citing industry experts.
While the slowdown is likely to persist, the number of digital downloads for games is expected a slight increase this year.
The games industry is struggling to gain momentum amid a slowdown in digital downloads, NDA analyst Patrick O’Sullivan said in a note on Thursday.
Video game developers, meanwhile will be in a bind as the games market slows to a crawl.
They can either turn to the games as a way to fill the void of the declining games market, or they can look to other markets, such as mobile, O’ Sullivan said.
China’s video game industry is a $4.5 billion industry, which has been hit by the global financial crisis and has struggled to recover.
“The games industry has suffered a significant blow from the recent events and is still in the midst of recovering from this,” said Yao Yuan, chief economist at China-based financial services firm Caixin.
“This will slow down the pace of growth in the video game market.”
China is home to more than half the world’s video games industry, with the number reaching $13.6 billion in 2020.
The country’s economic growth rate slowed to 1.4% in 2020 from 2.9% in 2017.