Rich markets are losing players, and growth has moved elsewhere
The games industry posts record revenue while studios lay off staff. The facts fit together. In most rich countries fewer people play and spending is below its 2021 peak. The record comes from China and the rest of the world.
Where it stands
Matthew Ball, then an outside analyst and since May 2026 an Xbox executive, argues the industry's growth engines are spent. Worldwide revenue is at a record, but the share of people who play is shrinking across most of the developed world, and the eight rich markets spent less in 2025 than in 2021. Publishers there are trying to earn more from the players who remain. In the US, the largest market, spending fell sharply in mid-2026, worst for console hardware even as console prices rose. The job cuts that came with this are on the layoffs page.
- Eight rich markets
- China
- Rest of the world
Since the 2021 peak, spending in the eight rich markets is down 4.5%. China is up 7.3%, and the rest of the world is up 41%.
SourceMatthew Ball, The State of Video Gaming in 2026 (deck updated 15 May 2026)
| Year | Eight rich markets | China | Rest of the world |
|---|---|---|---|
| 2019 | 85 | 32 | 22 |
| 2020 | 105 | 39 | 27 |
| 2021 | 112 | 45 | 28 |
| 2022 | 102 | 39 | 29 |
| 2023 | 104 | 42 | 31 |
| 2024 | 105 | 45 | 36 |
| 2025 | 107 | 48 | 40 |
| Market | Share who play | What was measured | Year |
|---|---|---|---|
| USA | Down 2.5 to 4 points | Share of people aged 5 and up who play, since before the pandemic. Three separate surveys agree: Circana, the Entertainment Software Association, and Ampere. | 2025 |
| Canada | Down about a sixth | Adult players lost between 2018 and 2022, despite lockdowns, per the Canadian trade association's most recent report. Canada is polled irregularly. | 2022 |
| South Korea | Down 15 points | Share of people aged 10 to 64 who play, against the 2017 to 2019 average, from the government's content agency KOCCA. That is 22 points below the pandemic high. | 2025 |
| Italy | Down more than 5 points | Share of people aged 6 to 64 who play regularly, since 2019, from the trade association IIDEA. Mobile is up a point, console down a point, PC down 6.5. | 2024 |
| UK | A third of 2020's gain lost | Share of people aged 16 and up who play, from media regulator Ofcom. It jumped 21 points in 2020, and a third of that has gone in the four years since, with every platform down. | 2024 |
| France | Flat at about 52.5% | Share of people aged 10 to 80 who play, from the trade association SELL. Level since 2016, though each platform on its own has shrunk. | 2025 |
| Germany | Up 4 points | Four more players per hundred people aged 6 to 69 between 2016 and 2024, from the trade association game. One of the few markets going up. | 2024 |
| Japan | Up 11 points | Share of people aged 5 to 59 who play since 2019, from Kadokawa. The outlier among the eight, though Japan's population is shrinking, so it is only about 6 million new players. | 2024 |
Timeline
2021
US players, hours and spending peak
The pandemic peak. Circana's Mat Piscatella notes that total spending, total players, and total hours played in the US all peaked in 2021. Everything on this page is measured against that high.
PlayStation Universe, Michael Harradence, on Mat Piscatella's Circana figures (26 February 2025)
2025
Spending hits a record $195 billion
Worldwide spending on games grows 5.3% to a record of about $195.2 billion, roughly $9.7 billion above the previous high in 2021. The figure covers console, PC, and mobile, and leaves out hardware.
Matthew Ball, The State of Video Gaming in 2026 (deck updated 15 May 2026)
Fewer people play in most big markets
Ball's country-by-country count: across eight developed countries that account for about 60% of what players spend worldwide, games have been losing ground for six years. The share of people who play has fallen in the US, Canada, South Korea, Italy, and the UK. It is flat in France and up only in Germany and Japan.
Matthew Ball, The State of Video Gaming in 2026 (deck updated 15 May 2026)
The growth since 2021 came from outside the rich markets
Where the record came from. Since 2021, spending in the eight rich markets has shrunk by $5.1 billion, or 4.5%. China is up $3.3 billion, or 7.3%, and every other country together is up $11.8 billion, or 41%. The worldwide record was set outside the markets where fewer people play.
Matthew Ball, The State of Video Gaming in 2026 (deck updated 15 May 2026)
US installs hit a 12-year low
In the US, spending on PC and console games is down 8%, or $2.3 billion, from its 2020 to 2021 level. Mobile spending is up 12% since 2020 but went flat in 2025. Mobile game installs are at a 12-year low, hours played on mobile have dropped, and time spent watching game streams has stopped growing.
Matthew Ball, The State of Video Gaming in 2026 (deck updated 15 May 2026)
Console growth goes to subscriptions
Console spending reaches a record $41.6 billion, 2.3% above its 2020 high. But more than all of that growth went to platform services such as subscriptions. Spending on the games themselves, and on purchases inside them, is down nearly $3.7 billion a year, or 11%.
Matthew Ball, The State of Video Gaming in 2026 (deck updated 15 May 2026)
2026
Xbox hires Matthew Ball as chief strategy officer
Xbox names the analyst Matthew Ball, whose report this page draws on, as its chief strategy officer on 20 May 2026. The report was published in February 2026 and last updated on 15 May, while he was still an outside analyst. From this point his public comments are an Xbox executive's.
Roblox loses players and 70% of its value
Roblox's share price falls 70% after its second-quarter results. Daily players are down to 123 million from a high of 152 million three quarters earlier, and the company expects the next quarter to fall 14 to 18%.
US spending falls 10% in July
US spending on games falls 10% in July to $4.5 billion, a total that covers games, hardware, and accessories. Spending on games is down 9%, and hardware is down 29% to $282 million, even as the average price of a new console rises 16% to $542. Through seven months, the US market is 2% behind 2025.
Newzoo: earning from existing players matters more
Newzoo's forecast for 2026: a $213.9 billion market, up 6.1%, with 3.70 billion players, up 4.4%. About 1.65 billion of them pay, and each paying player spends $129.60 a year on average, up 1.4%. Newzoo counts the whole world, where most new players are, which is how it can forecast growth while the US runs behind. It says keeping and earning from existing players now matters more to revenue than finding new ones.
Storyboard18, on Newzoo's Global Games Market Report 2026 (11 September 2026)
Consequences
012025
Growth has to come from the players who are left
If fewer people play, growth has to come from those who remain. Ball lists the options: raise prices, get players to buy more, sell advertising, or make the game serve another business, such as a subscription. He argues the losses compound. Players who stay tend to play less, a game can only grow by taking players from another game, and new games find it harder to break through.
Matthew Ball, The State of Video Gaming in 2026 (deck updated 15 May 2026)
022026
What earning more from each player looks like
A player meets it as a subscription on top of the console, ads inside the game, and prompts to buy in-game currency from the publisher's own web shop rather than the app store. Ball names advertising and direct-to-player payment channels among the five biggest areas of revenue growth in 2026. None of them needs a new player. Each needs an existing one to pay again, or to sit through an ad.
Matthew Ball, The State of Video Gaming in 2026 (deck updated 15 May 2026)
032025
Record console spending, less of it on games
On consoles, the extra money goes to the platform, not to the games. Console spending hit a record in 2025, but more than all the growth since 2020 went to services such as subscriptions, while spending on games and in-game purchases fell 11%. A record year for the console business and a shrinking market for the people who make console games are the same set of numbers.
Matthew Ball, The State of Video Gaming in 2026 (deck updated 15 May 2026)
042026
Higher prices are starting to cost sales
There is a limit to raising prices, and the US may have hit it. In July 2026, the average price of a new console was up 16% while hardware spending was down 29%. Mat Piscatella reads rising console prices as weighing on sales. Charging the same players more only works while they keep paying.
Objections
Counterpoint2025
Against 2021, the rich markets are spending less, not more
The rich markets are not where the record came from. By Ball's own figures, players in the eight rich markets spent $107 billion in 2025, less than the $112 billion of 2021, so since the pandemic peak they are fewer and spending less in total. The squeeze shows against 2019, when the same markets spent $85 billion. Against 2021, the worldwide record is a story about China and everywhere else.
Matthew Ball, The State of Video Gaming in 2026 (deck updated 15 May 2026)
Counterpoint2026
Worldwide, the number of players is still growing
Newzoo counts 3.70 billion players in 2026, up 4.4%, with the Middle East and Africa growing fastest at 7.9% and Asia-Pacific the largest region at 1.94 billion. Ball's decline is a finding about eight rich countries. They hold most of the spending, but they are not the whole market.
Storyboard18, on Newzoo's Global Games Market Report 2026 (11 September 2026)
Counterpoint2025
The players who left may not have spent much
Ball raises this objection himself: someone who stopped playing altogether probably was not playing or spending much, so it is unclear how much was really lost. His answer is that the losses compound, but he offers that as an argument, not a measurement. His report does not show what the departed players used to spend.
Matthew Ball, The State of Video Gaming in 2026 (deck updated 15 May 2026)
Counterpoint2025
India counted fewer players in 2025, not more
Lumikai, a venture fund that invests in Indian games, counts 555 million gamers in India in 2025, down 9% from 609 million, and 139 million paying, down from 152 million. It reads the fall as the ban on games played for money trimming the base. Lumikai does not define a gamer by age or by period of play.
Lumikai, State of Interactive Media Report 2025 (23 March 2026)
What to watch
2027
Whether US spending ends 2026 down
Circana's full-year US figures, due in January 2027. The market was 2% behind 2025 after seven months. A finish below 2025, in a year with a Grand Theft Auto release, would confirm the turn.
2027
Whether the share of people who play finds a floor
Ball's next State of Video Gaming report, due early in 2027. Several national surveys, including Italy's, report during 2026. They will show whether the share of people who play is still falling in the US and South Korea or has found a floor.
Matthew Ball, The State of Video Gaming in 2026 (deck updated 15 May 2026)
Further reading
- ResearchThe State of Video Gaming in 2026 (Matthew Ball / Epyllion)matthewball.co
- ReportingRoblox chose retention over short-term spendpcgamer.com
- CommunityWhat is a monetization scheme you actually support?reddit.com
Where to follow it Matthew Ball / Epyllion annual State of Video Gaming, The Game Business (Christopher Dring), Circana (Mat Piscatella), Newzoo
- Games companies are still cutting jobs
- China's growth is going to Chinese-made games
- Publishers are retreating from live-service games
- Investors are pulling money out of studios
- Mobile games are struggling to find new players
- AI data centers are taking the memory games hardware needs
- Game prices are stalling as hardware prices climb
- Games media is consolidating and shrinking