A warning light has just flashed red in the gaming industry’s dashboard. According to Circana market data, young American consumers’ spending on video games is dropping hard, with average weekly spend down by almost a quarter year-on-year. This trend is part of an overall belt-tightening among 18-24 demographic groups, but video games are the most affected segment.
The decline in gaming spending comes as a surprise, given that prices have historically been low in inflation-adjusted terms. However, consumers’ perceptions of value are changing. The industry’s strong narrative about games being expensive and overpriced has reached a fever pitch, with examples of high console prices, soaring graphics card costs, and increasingly pricey AAA games fueling the sentiment.
The problem lies not in the technical reality of gaming prices but in how they affect consumers’ emotions. Games are seen as expensive right now, and that perception will drive spending cuts during tough times. Companies with powerful brands may be able to maintain price-setting power, but many others will need to innovate flexibly around pricing to survive.
As the industry braces for a potential recession, it’s clear that games have lost their traditional shield against economic downturns: their value proposition. The question now is how companies can adapt and find new ways to win consumers’ trust in this challenging environment.
Source: https://www.gamesindustry.biz/another-industry-recession-warning-light-just-flashed-red-opinion