Wondering whether inflation has affected the gaming industry? Here are the most important developments!
Due to the ongoing world crisis, high inflation is about to define today’s global economic situation and the gaming industry. As energy prices keep on rising, the cost of living follows suit as well. Thus, many third-world countries started deriving ways to avoid a recession.
However, can this impede our daily consumption of popular media like video games? Also, can play-to-earn games halt the inflation crisis’ progress and support a thriving niche market? In the recent two years, there have been several notable examples of how inflation has affected the gaming industry.
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Is the gaming Industry “Inflation-Proof”?
Within this decade, video games outgrew their status as a “hobby.” Nowadays, they comprise an industry with a sure stride forward. Also, consumers can take part from the comfort of their homes and play games with friends online. Hence, investors find video games to be an optimal product to enjoy during this unprecedented inflation.
Experts assume that, on a global level, consumers will spend a record $203.1 billion on games in 2022 alone. This amount is higher than the projected $192.7 billion in revenue for 2021.
Today’s Play-To-Earn Games
Many streamers focus on the “play-to-earn” type of video games. These allow players to build a team and earn rewards. For example, you can earn points by simply trying out a mobile game for 30 mins or by filling up a short survey. Similarly, some games include in-game ads that all players can comment on.
Next, users can swap their game cash for prepaid charge cards and gift cards from online shops. Today, a ton of hyper-casual or puzzle games revolve around these goals.
The Current Gaming Landscape and the rising inflation costs
Analysts predict that the inflation will slump all video games revenue. Case in point: the release of Sony’s PlayStation 5 and Microsoft’s Xbox Series S consoles were both far from smooth. Also, due to logistics issues and shortages of essential parts, it’s difficult even to track down any of those products today.
The Russian invasion of Ukraine is yet another slowdown in the supply chain. Next, we witnessed sharp price increases. On top of that, many renowned gaming software companies quickly opted to cease business in Russia. Thus, a sizeable part of the market is currently closed off.
According to Piers Harding-Rolls, research director at Ampere, the numbers show that the gaming industry is not “crisis resistant.” He believes the video games market will likely give up some of its gains in the following years. The industry also suffers from delays for high-profile titles like Microsoft’s Starfield and Redfall.
At the same time, Apple’s new privacy rules impact most mobile game companies. In short, the rules make it more difficult for them to identify iPhone users. So, players need to spend more time in lobbies than before. This might prompt some of them to avoid trying a new game
Although some experts fear a decline in the gaming industry, on account of lower purchasing power and high inflation, defeat in an industry so well-grounded is hard. Despite the uncertainty, gaming will prevail in its community and people all over the world will continue to invest in what they enjoy the most.
How do gaming companies adjust pricing according to inflation?
Approximately every year, pricing by location is adjusted to take into account variables like inflation, currency depreciation, and exchange rates.
How do video games generate revenue?
Video games earn revenue through sales/purchases, subscriptions, microtransactions by players and advertisements.