Recession and growth: How the video game market is going to bounce back in the next decade

The video game market has greatly evolved over the last couple of decades to become one of the largest in the industry. Coupled with the growth in hardware, the avenues of gaming today couldn't have been imagined even a year ago.

Having said so, it's not free from the economic and market forces that govern the world, and a new study has revealed some important information about the foreseeable future. However, it might be too early to worry about a potential doomsday of the gaming industry.

Modern-day gaming has evolved dramatically from what it used to be once upon a time. Video games are no longer seen as a tool for pure entertainment, as professionals have helped to grow the ecosystem even more. It's one of those rare industries that could manage the COVID-19 pandemic quite well. That being said, a new study has forecast that there will be a downmarket in the gaming sector in the upcoming future.

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A new study forecast a depressed market for video games due to external factors

According to Eurogamer, a new study looks into the immediate future of video games. As mentioned above, the market thrived during the COVID-19 pandemic as billions worldwide were locked in their houses.

While other markets were declining, growth was noticed in the early parts of the pandemic, which coincided with the deadliest part of the pandemic. However, there's a presumption that sales will be reduced shortly.

Conducted by Ampere analysis, the study finds that the PC gaming market will be hit by factors like hardware shortages, which continue to be a problem.

Results from the study (Image via Ampere Analytics)

According to market analyst Piers Harding Rolls, the market will subside after seeing substantial growth in the last two years.

"After two years of huge expansion, the games market is poised to hand back a bit of that growth in 2022 as multiple factors combine to undermine performance."

However, it shouldn't be an immediate concern. Some would even say this was expected. Several factors have resulted in a decline aside from the shortage of hardware.

The global chaos between Russia and Ukraine has resulted in many publishers and companies pulling out of the European giant. It would be childish to think that this did not affect the sales and finances of video games.

There have been more developments in the Asian markets, like the tightening of digital privacy. Overall, all of these seem to be black swan events that don't happen in a repeated manner. These occurrences will force companies to adjust accordingly. Once that's done, the expectations are that the market will again see growth in 2023.

A market downturn doesn't mean that the craze of video games is dying. If anything, there has been an upswing in demand, particularly for consoles. Thanks to a chip shortage, the PS5, and the Xbox Series XlS have been hotly sought after worldwide.

However, an important lesson is that no market or industry is free from recession. It now remains to be seen when there could be a comeback and if the gaming sector will be able to keep up the previous spell of sustained growth as it moves into the third decade of the new Millennium.