Videogame firms brace for dull holiday season

As the COVID-19 pandemic subsumes and recession and inflation worries persist, the global videogame industry is facing its first annual sale decline in nearly a decade.

In the latest earning announcements, major video game publishers issued somber outlooks for the current quarter of 2022, which is typically the industry’s biggest by revenue because of the holidays, as people spend less time at home and grapple with inflated prices for everyday goods.

On an earnings call earlier in November 2022, Hiroki Totoki, the finance chief at Sony Group Corp, said they recognized that the risk of the global economy slowing down is increasing further. He added that the users of the company’s PlayStation consoles appeared to be playing a smaller number of videogame titles out of a desire to spend less money.

The videogame industry is coming off its hottest-ever streak. COVID-19 had people worldwide stuck in their homes, and many used that time to play more video games. On top of macroeconomic factors and the tapering of pandemic-related demand, the videogame industry is getting pinched in 2022 by the strong dollar and lack of new blockbuster videogames.

Take-Two Interactive Software Inc., Electronic Arts Inc., Ubisoft Entertainment SA, and Microsoft Corp. are among the publishers without big-budget releases this holiday season.