The video game industry has been on a collective trajectory of growth year on year globally since 1995, which marked the dawn of the polygonal 3D era. However, 2019 might see the very first time in fifteen years that that trajectory is reversed—at least a little.
Speaking to Bloomberg, financial analyst Pelham Smithers said that he sees revenue for the video game industry declining by 1% year on year this year, attributing the decline to a lack of new, fresh blockbuster games, China making game approvals be far slower, and the tapering off of the battle royale games craze.
“The various bits of the jigsaw puzzle just don’t add up, so we’re looking for the market to shrink in 2019,” said Smithers. “The sell-off in video game stocks is primarily down to a growing realization of the risk that this view is right,” he said. “There is a lack of fresh, innovative blockbuster titles replacing the current, ageing top titles. For the longer term, we are now more cautious about the global growth rate of the mobile games market.”
To be fair, given that the PS4 and Xbox One should officially be entering decline this year, this makes sense. The Switch is primed to enter its peak years, however one console and its games alone can’t make up for the underperformance of two other ones.
With that said, 2018 itself was a bumper year for the industry, according to the NPD Group, so just a 1% decline from that year on year wouldn’t be too bad. As long as it is not indicative of a larger, longer term negative trend, that is.
