Ampere Analysis: UK console, PC and mobile games revenue declined in 2022
It's the first decline in a decade, but the market remains well ahead of pre-pandemic levels
UK spending on video games dropped 1.6% to £5.38 billion in 2022, according to the latest report from Ampere Analysis.
The data firm says it is the first decline for the UK market since 2012. However, the numbers remain 23% higher than 2019 (pre-pandemic levels). The games market received an artificial surge in sales caused by the lockdowns in 2020 and 2021.
Outside of the post-lockdown drop, the UK market also saw a fall in spending towards the end of the 2022. Ampere says that the decline is due to the economic situation in the UK, including the growing cost of living crisis. The biggest declines during the period were across in-game monetisation, which covers more casual mobile titles.
The mobile games market suffered a 3% drop in sales to £1.66bn. According to Ampere's consumer research, this was due to younger gamers (16 to 34-year-olds) and older gamers (55 to 64-year-olds) spending less time on games post-pandemic. The other major challenge for mobile developers is the new privacy rules from Apple, which has disrupted the app developers' abilities to target specific consumers through their marketing. This was particularly felt by more specialist titles and apps, Ampere says.
Over in the console space, we've already reported on the overall games software sales. But including DLC and in-game monetisation, Ampere estimates that the console space dropped 1% in 2022 to £2.89 billion. The drop in spending would have been worse had it not been for the growth in subscription service revenue. Without subscription services, the overall market would have dropped 3.2%, the firm estimates.
Subscriptions may have grown revenue-wise, but it wasn't without its own challenges. Ampere says that there was a drop of 300,000 paying subscribers in 2022. However, overall spending is up due to higher tier offerings from PlayStation and Nintendo, which carried a premium price point. The three console players dominate the subscription service landscape in the UK and globally, Ampere says, with cloud streaming services only accounting for a tiny part of the market.
Other challenges in the console space included a drop in sales for Nintendo Switch as the platform begins to age, an intermittent release schedule, delays to third-party games and the lack of availability of PS5 and Xbox Series X. Xbox Series S was the only platform 'readily available' but doesn't have the 'high-end pull' of the Series X, Ampere writes.
Finally, in PC, taking into account all monetisation models, revenue dropped 1.2% in 2022 to £815 million. The number of premium PC games sold declined, although this was offset by a higher average selling price. This was due to several AAA PC titles coming to market, including Spider-Man, God of War and Monster Hunter Rise.
In terms of online spend, as players spent a little less time gaming, that caused a drop in revenue. However, there were notable exceptions, Ampere says. Roblox has been able to 'hold on to its pandemic-based growth', and the firm believes this is due to it broadening its appeal to more age groups.