US physical game spending has plummeted by more than 50% since 2021, as revealed by recent data from market research firm Circana. This decline reflects a significant shift in player preferences towards digital gaming, a trend that has been gaining momentum for over a decade.
Accelerated Shift to Digital Gaming
The transition from physical to digital games has accelerated, particularly following the pandemic. Factors such as faster internet speeds, the rise of online marketplaces on consoles, and the popularity of live service games funded by microtransactions have all contributed to this trend. According to Mat Piscatella, executive director at Circana, physical game sales are now more than 85% below their peak in 2008.
Overall Spending Trends
Despite the sharp decline in US physical game spend, overall content expenditure—including both physical and digital formats—has increased since 2019. The data indicates that while digital gaming continues to grow, it is not uniform across different platforms or game franchises. For instance, Xbox’s digital share rose to 75%, while PlayStation 5’s share increased to 64%. In contrast, Nintendo’s digital sales remained stagnant at 22%.
Impact of Game Releases
A contributing factor to the steep decline in physical game sales during 2024 was a weaker-than-usual release schedule for the Nintendo Switch, which typically supports a substantial portion of physical sales. The overall landscape for new game releases was quiet, with only six new titles making it into the European top 20 in 2024—a drop from ten in the previous year.
As we move into 2025, industry analysts will be watching closely to see if upcoming releases like the anticipated Switch 2 can help reverse this downward trend in US physical game spending.
For more insights on gaming trends and market analysis, stay tuned for updates.
