Gaming market falls 24% in Q2 2018 as we wait for the next big thing

The gaming market has reached something of an impasse; the huge surge in sales of Nintendo Wii is over and neither Sony nor Microsoft have yet announced replacements for the PS/4 and Xbox, which will drive spending upwards once more. My Figure shows the revenues in the last year of the leading vendors, split by hardware and software sales. Nintendo is the current leader, followed by Sony and Microsoft.

The ‘lack of the new’ resulted in a 24% decline in Q2 sales over the previous year (don’t panic – big shifts in market value are typical in this ‘stochastic’ market, with peaks and troughs dependent on the launch and expectations of console users. Unit shipments declined by 11% to 7 million and the installed base of dedicated consoles stood at 168 million.

So my forecast remains pretty much as it was last quarter, with annual predictions for 2018, 2019 and 2020 at levels similar to 2017. I’ll redraw them once either Sony, Microsoft, or both announce new machines. For now we’re in one of those periods when we wonder whether this relatively small and very proprietary market will continue indefinitely. Don’t worry, we’ll all cheer up once we get the next new thing!