Only 37% of US Players Buy More Than Two New Games Per Year

New research from Circana indicates that 33% of U.S. gamers purchase new titles less than once a year, reflecting the significant impact of rising game and hardware costs on consumer spending habits. This trend highlights the increasing importance of subscription services like Xbox Game Pass and PlayStation Plus, despite their own recent price increases, and the growing revenue generated by free-to-play games through in-game transactions, which are not captured in traditional purchase data. The evolving landscape suggests potential challenges for traditional game sales models and an advantage for major franchise releases in a more selective market.

Analysis

While players are aware of how much the price of games have increased in recent years, it’s not always clear how this is translating into impact for the games industry. However, a gaming news report by analyst firm Circana has revealed numbers that highlight just how much the rising costs of games and hardware is impacting US players. Circana’s research on game purchasing frequency was split into six categories in response to the question “how often do you purchase a new game?” - More often than once a week – 4% - About once a month – 10% - About once every three months – 22% - About once every six months – 18% - About once a year – 12% - Less often than once a year – 33% The final response is by far the is the most prominent, and examining some of the current talking points in the gaming news industry can help to illuminate why. Are Gaming Subscriptions Killing One-Time Purchases? While these numbers might appear low, it’s important to remember that buying games isn’t a player’s only choice in the current landscape. Both Xbox and PlayStation offer subscription services – Game Pass and PlayStation Plus – that allow players to pay a monthly fee in order to access an extensive library of games. In many ways, this can mitigate the need to buy new games at all, especially when new titles come to Game Pass and Plus regularly. However, the rising costs of these services can threaten to dislodge their status as a more cost-effective route, particularly with many now questioning whether Xbox Game Pass is worth the new price hike. Free to Play Games There is also a semantic consideration here. The research doesn’t include games that are free to download like Apex Legends or Fortnite, because players don’t have to buy them to play them, despite games like this often being among the most played. These games can generate a lot of income from in-game transactions, with Fortnite set to allow players to sell content in-game from December. With game purchases themselves being so low, titles that are capable of appealing to as large an audience as possible, such as GTA 6, are going to have a clear advantage over less known titles, especially if a consumer is forced to choose between one or the other. However, the success of games like Golden Joystick favourite Clair Obscur: Expedition 33 shows that it’s certainly possible. The Circana report highlights a significant shift in U.S. consumer gaming habits, with 33% of players purchasing new games less than once a year and only 4% doing so more than once a week. This data underscores the impact of rising game and hardware costs, leading to a constrained environment for traditional game sales and contributing to an overall mildly negative market sentiment. This purchasing shift is influenced by the growing adoption of subscription services like Xbox Game Pass (MSFT) and PlayStation Plus (SONY), which provide extensive game libraries for a monthly fee, reducing the need for individual purchases. However, recent price increases for these services, particularly Xbox Game Pass, are raising concerns about their long-term value proposition and potential impact on subscriber retention (MSFT sentiment -0.4). Furthermore, free-to-play (F2P) games, generating substantial revenue through in-game transactions, are demonstrating robust monetization strategies not captured by traditional purchase data, benefiting companies with strong F2P portfolios (EA sentiment 0.1). This evolving landscape favors major franchises, such as Take-Two Interactive's GTA 6 (TTWO sentiment 0.5), which are better positioned to capture consumer spending as players become more selective.

Key Decisions for Investors

• Monitor subscriber growth rates and pricing power of gaming subscription services offered by companies like Microsoft (MSFT) and Sony (SONY), as rising costs may impact retention.
• Assess publisher portfolios for strength in free-to-play titles and robust in-game monetization strategies, which are proving resilient amidst declining traditional game purchases (e.g., EA).
• Prioritize investments in publishers with established, highly anticipated tentpole franchises (e.g., Take-Two Interactive's GTA 6) that are less susceptible to reduced consumer purchasing frequency, as consumers become more selective.