Microsoft and Sony have released financial statements showing that in the last quarter, revenue from the game segment decreased compared to the same period last year.
In addition to the impact on sales of gaming hardware and software, people also spend less time playing games than they did last year. Player activity on Microsoft and Sony’s Xbox Live and PlayStation Plus online game services both declined last quarter.
How big is the decline in the gaming industry? In the US market in June this year, total sales of gaming hardware, content (software) and accessories were about $4.3 billion, down 11% year-on-year, according to the company. NPD market research. However, that number is still much higher than pre-pandemic levels. NPD says the US gaming market only made $959 million in June 2019.
Microsoft and Sony’s revenue fell.
Last quarter, both Microsoft and Sony’s game software sales were worse than in the same period last year. According to Microsoft, content and services revenue from the company’s games division fell 6% year-over-year due to a drop in player activity and Xbox gaming revenue.
Microsoft doesn’t release specific numbers on game and hardware sales, but mentions that the PC division (which includes Xbox platform hardware and software sales, Windows sales, and advertising revenue) generated $14.4 billion in revenue last quarter, up 2% from the previous year.
Sony’s financial reports show that the company’s software revenue last quarter was about $2.3 billion, down 13% year-on-year. For the whole quarter, game software sales for PS consoles totaled about 47.1 million units, down 26% year-on-year (63.6 million copies). Like Microsoft, Sony cites the weak market for first- and third-party games on the PS platform as one of the main reasons for the decline in the company’s games division.
Sony Chief Financial Officer Hiroki Hiroto said: “In the first quarter, total game time for PlayStation users fell 15% year-on-year, down 10% compared to June 2021 figures, but activity Overall performance remains far below our previous expectations.”
During the pandemic, due to supply chain disruptions and global chip shortages, game hardware such as PS5 and Xbox Series X/S are scarce in the market, making it difficult for players to purchase new game console. According to a Microsoft report, Xbox hardware sales fell 11% year-over-year. For comparison, Sony PS5 sales for the same period ($1.5 billion) were up from $1.3 billion last year. Sony said it hopes to increase PS5 supply over the Christmas holiday and will not change its forecast of 18 million PS5 sales in 2022.
Tencent is the number one game maker in the world despite its difficulties in China.
In the first half of this year, game hardware sales in the U.S. market were about $371 million, down 8% year-on-year, NDP said in a report. In the global market, new console sales reached $2.1 billion in the first half of the year, down 9% year-on-year.
Microsoft and Sony are both gearing up for the traditional peak season of console game sales. Sony says the PS will welcome some highly-anticipated gaming masterpieces over Christmas, including God of War: Ragnarok and a remake of the original The Last of Us. Microsoft, on the other hand, is working to complete its acquisition of Activision Blizzard, a deal that will further boost the company’s gaming division with top-grossing titles such as Call of Duty, World of Warcraft, and World of Warcraft. Candy Crush Saga.
