According to numbers compiled by Stocklytics.com despite the growing number of gamers, spending on gaming equipment is on the decline and this is expected to continue in the coming years.
Stocklytics.com said the annual growth rate in the gaming equipment market is anticipated to halve, dropping to just 1.7 per cent by 2029.
Supply chain issues, global economic conditions, and a shift towards mobile and cloud gaming have significantly impacted the gaming equipment market in recent years, leading to fluctuations and slowdowns in revenue growth.
While the pandemic and the launch of new-generation VR headsets and consoles, such as the PlayStation 5 and Xbox Series X, caused a surge in global gaming equipment sales between 2020 and 2022, the market is now cooling down, with growth rates far below those seen in previous years.
A Statista Market Insight survey revealed that global gaming equipment sales experienced double-digit growth between 2019 and 2022, with an average annual increase of 15 per cent.
The years 2020 and 2021 were particularly strong for gaming consoles and VR headsets, with revenues rising by 23 per cent and nearly 17 per cent, respectively. However, growth has since slowed dramatically.
After falling to five per cent in 2023, the annual growth rate in the gaming equipment segment is forecasted to drop to 3.6 per cent in 2024, a sixfold decrease since 2021. This downward trend is expected to continue, with Statista predicting the annual growth rate will fall to just 1.7 per cent by 2029. This modest growth will result in a market revenue increase of only 11 per cent, or $4 billion, over the next five years, compared to an 88 per cent increase in the past six years.
Statista data indicates that China, the world's largest gaming market, will see the most significant decrease in gaming equipment spending.
In 2024, Chinese consumers are expected to spend around $4 billion on gaming consoles and VR headsets, a 10.2 per cent increase from last year. By 2029, market revenue will rise slightly to over $4 billion, but the annual growth rate will plummet 34 times to just 0.3 per cent.
Americans are bigger spenders on gaming equipment. By 2029, US gaming equipment revenue is projected to rise from $9.7 billion to $10.9 billion, with the market growth rate doubling to 1.8 per cent.
Japan is also facing a slowdown, with gaming equipment sales expected to increase by only $100 million over the next five years, while the growth rate will drop from 3.8 per cent to 0.7 per cent.
When analysed by device type, VR headsets are facing a more severe decline than gaming consoles, with their annual revenue growth rate expected to drop fivefold to 1.6 per cent by 2029. The growth rate for gaming consoles is expected to remain flat at 1.8 per cent.