REPORT THE
David Cole from DFC Intelligence explains the latest data forecasts from his company, and what they mean for the year to come
T
he video game industry has faced significant challenges over the past few years. However, consumer engagement remains strong, with players
worldwide continuing to buy and play video games at record levels. With the anticipated release of major new products in 2025, we at DFC Intelligence forecast robust growth in the years ahead.
UNDERSTANDING RECENT CHALLENGES The video game industry has enjoyed long-term growth, but the impact of the COVID-19 pandemic in 2020 temporarily distorted that trajectory. The pandemic led to an artificial surge in demand, with gaming becoming a primary entertainment outlet during lockdowns. At the same time, the pandemic-induced supply chain disruptions and logistical hurdles placed immense strain on game development and hardware manufacturing. As a result, many companies faced production delays, game cancellations, and ultimately, widespread layoffs across the industry. Despite these difficulties, consumer demand for video
games remains resilient. The industry’s primary challenge the past two years have been slowing sales of the Nintendo Switch and underwhelming performances from Sony’s PlayStation 5 and Microsoft’s Xbox Series X/S, both of which fell short of initial expectations.
2025: A PIVOTAL YEAR FOR GROWTH A major catalyst for industry growth in 2025 will be the launch of Nintendo’s next-generation console. The company has a strong track record
24 | MCV/DEVELOP February/March 2025
of revitalizing the market with innovative hardware, and analysts predict the new system will be a key driver of sales. Additionally, Rockstar Games is expected to release Grand Theft Auto 6, which DFC Intelligence projects will be the fastest-selling entertainment product in history. While Nintendo’s trajectory appears solid, Sony and
Microsoft face more uncertainty. DFC has generated multiple potential scenarios for new hardware releases from both companies. Because these products are unannounced and speculative this allows us to do multiple assumptions around features, release date, pricing and form factor.. A key industry dynamic is the rise of PC and mobile gaming, which could limit the market potential for three dominant console platforms. As a result, either Microsoft or Sony may find themselves falling behind, with many analysts betting on Sony to secure the number two position while Microsoft pivots toward a broader multi-platform business model.
THE SONY-MICROSOFT COMPETITIVE LANDSCAPE Sony’s gaming division experienced a 20% increase in software and services sales in 2024, yet hardware sales have lagged, in part due to a lack of emphasis on marketing. During the early years of the PlayStation 5 and Xbox Series X/S, both consoles consistently sold out with minimal promotional efforts. However, as supply constraints eased, sales did not meet expectations, largely due to a lack of aggressive outreach to a broader audience beyond core gamers. Nintendo, in contrast, has excelled at both product
innovation and marketing. Nintendo of America, for example, focuses on effectively positioning products tailored
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