Earlier this morning, Mat Piscatella, an executive director and video game industry analyst at The NPD Group, announced via Twitter analytics regarding video game sales for January 2023. This Twitter thread revealed the top twenty best-selling games of January 2023 and the overall revenue of the US gaming industry, which he revealed, has dropped by 5% since January 2022. According to Piscatella’s Twitter, this is the first year-by-year drop in the US video game market since September of 2022, when the market dropped by 4%.
Within the same thread, Piscatella notes that this drop is not due to a drop in hardware sales, as those have remained relatively stagnant. The biggest drops in revenue came from video game content (a drop of 5% from January 2022), and video game accessories (a drop of 14% from January 2022).
This decrease in US video game sales has broken the momentum gained over the last three months of overall video game sales. According to SeekingAlpha, October 2022 marked the first time in eleven months that video game sales had increased on a year-by-year basis.
Throughout 2021, there was a large spike in video game sales. This spike came after a record jump in 2020, with an overall increase in revenue by 27%. According to Bentley University, this jump was most likely in large part due to how the video game industry was affected by COVID lockdowns. With people staying inside due to their limited access to the outside world, many stayed inside playing video games as an alternative. This caused a massive inflation in the video game market that could not be replicated in 2022.
This inflation caused the 11-month decline in video game numbers, as compared to their previous years, which ended in October 2022. Since then, there has been an increase in numbers from October through December, in large part due to the strong performance from the PlayStation 5 and Nintendo Switch. This increase did not continue through January (though not from a poor performance from the PS5 or Switch).
After many months of highly varied sales numbers, this decrease could mean the beginning of another decline in sales, the return to a more stable market, or any number of unknowable outcomes. Regardless of what this decrease means, with a revenue of $4.3 for the month, the US video game industry is still going strong, regardless of the fluctuating revenue.