Video game spending in the US, which showed sustained growth through the pandemic, continues to stall, according to new data from Circana (rebranded after the merger of NPD Group and IRI). Total video game spending slipped by 1% year-over-year in Q1, to $13.58 billion, though that was a better result than in Q1 2022, when spending fell by 8% year-over-year.
The Q1 2023 growth rate was brought down by a slow March, in which video game sales fell by 5%. That followed a 6% year-over-year increase in February and a 5% year-over-year drop to start the year in January.
Overall, video game spending in 2022 dropped by 5% year-over-year, per earlier data, with Q2 2022 a particularly slow quarter for the industry.
This latest data indicates that in Q1 2023, content spending was down by 4% year-over-year to $11.51 billion. Hardware spending enjoyed strong growth, with a 21% year-over-year rise to $1.455 billion, while Accessories spend was flat at $617 million.
While spending dips after the pandemic, video games continue to hold strong appeal among Americans, particularly youth. Recent research indicates that 13-24-year-olds spend more of their screen-based leisure time with games than with TV or social media. Moreover, the overall market, excluding esports, is expected to overtake the TV advertising market in size in the next few years, and some 69% of American households contain at least one video game player.