"The gaming preferences of Generation Z could potentially pose significant challenges to the industry's long-term prospects"
In a significant shift for the gaming industry, a new study by Circana, an American market research and technology company, has revealed that Gen Z is spending nearly a quarter less on video games compared to the same period in 2024. This decline, which is primarily attributed to harsh economic pressures, is causing concern for the future of the gaming industry.
The study found that young people aged 18 to 24 are tightening their budgets due to difficulties in finding jobs post-graduation, the restart of student loan payments, rising prices, and increasing credit-card delinquency rates. As a result, they are cutting back sharply on entertainment, including video games. In contrast, older generations' gaming spending dropped by less than 5%, highlighting a significant disparity.
Mat Piscatella, senior director and video game industry thought leader at Circana, shared parts of the analysis and report on BlueSky. He further posted that the decline in gaming spend among Gen Z is not just a pull of the rug, but a burning of it while they are still standing on it.
The study included popular games such as Clair Obscur: Expedition 33, The Elder Scrolls IV: Oblivion Remastered, and South of Midnight. Echoes of the End, one of the year's hottest indie games, was also part of the research.
Interestingly, Gen Z is engaging more with free-to-play games on devices they already have access to. This trend, coupled with the decline in gaming spending, could be a sign of changing consumer habits in the gaming industry.
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The study's findings were reported in the Wall Street Journal, suggesting a potential negative impact on the gaming industry due to Gen Z's changing gaming habits. Big titles released in 2025, such as Death Stranding 2: On the Beach, Monster Hunter Wilds, and Assassin's Creed Shadows, may still attract older generations, but the future of the gaming industry will likely depend on how it adapts to the changing spending habits of Gen Z.
[1] Wall Street Journal, "Gen Z's Gaming Spending Plummets Due to Economic Pressures, Study Finds" [2] Circana, "Market Research Report: The Impact of Economic Pressures on Gen Z's Gaming Spending" [3] BlueSky, "Mat Piscatella's Analysis: The Decline in Gen Z's Gaming Spending"
Technology and gadgets continue to play a significant role in Gen Z's entertainment, as they engage more with free-to-play games on their existing devices. However, a study by Circana reveals a decline in Gen Z's gaming spending, which could be a sign of changing consumer habits in the gaming industry. This shift, primarily attributed to harsh economic pressures, might have profound implications for the future of the gaming industry.
