The U.S. video game market has seen a significant drop in hardware spending, with a 40% decline compared to 2023, according to Circana's May 2024 highlights.
This trend reflects double-digit percentage decreases for all major console manufacturers—Microsoft Corp. (NASDAQ:MSFT), Nintendo ADR (OTC:NTDOY), and Sony Group Corp. (NYSE:SONY). Notably, the Nintendo Switch has experienced the steepest decline in sales.
Impact Of Major Game Releases
Circana's Executive Director and Video Game Industry Advisor, Mat Piscatella, noted on X/Twitter that this hardware spending slump can be "partially" attributed to the release of The Legend of Zelda: Tears of the Kingdom.
May 2024 U.S. Video Game Market Highlights from Circana – Projected U.S. total spending on video game hardware, content and accessories fell 6% in May 2024 when compared to a year ago, to $4.0 billion. Year-to-date 2024 spending was 2% higher than a year ago, at $22.8 billion. pic.twitter.com/QtKko05BoI
— Mat Piscatella (@MatPiscatella) July 8, 2024
The game was launched exclusively for the Nintendo Switch on May 12, 2023, and spurred a temporary spike in console sales last year.
Rumors Of New Hardware On The Horizon
Amid these declines, speculation is rife about upcoming hardware from the big three console makers. Microsoft has already announced updated versions of the Xbox Series X and S. Sony is rumored to be planning a Pro variant of the PS5 later this year.
Meanwhile, Nintendo is expected to release a next-generation successor to the Switch in 2025. These anticipated releases may be causing consumers to hold off on purchasing current models.
Top-Selling Games In May 2024
Despite the hardware slump, game sales remain robust. Circana reports that the top-selling games in terms of dollar sales for May 2024 were Ghost of Tsushima, Paper Mario: The Thousand-Year Door Remake, and Call of Duty: Modern Warfare 3 (2023).
Ghost of Tsushima saw a dramatic rise in its sales performance, jumping from 71st to first place following its PC port release on May 16. This surge highlights the growing importance of multi-platform releases in driving game sales.
Upcoming Exclusives For The Holiday Season
Looking ahead, all three console holders are gearing up for the holiday season with exclusive titles. Xbox is set to release Indiana Jones and the Great Circle, while the PS5 will feature Astro Bot as its marquee title. The Switch aims to finish 2024 strong with The Legend of Zelda: Echoes of Wisdom.
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Photo by Sara Kurfeß on Unsplash