The video game industry has grown year after year for some time now, and games account for a larger share of people’s entertainment spending now more than ever. The COVID-19 pandemic made 2020 a particularly unusual, but profitable, year for video games with people spending a lot of time at home during the year. More people looking for a way to pass the time jumped into the games, and the sales figures reflected that. Games like Animal Crossing: New Horizons hit huge sales milestones, and the console market as a whole saw growth in the billions in 2020.
Certain facets of the console market were very hot in 2020, with new console offerings from Sony and Microsoft, as well as the continued success of the Nintendo Switch. The range of platforms available to gamers made the console market even more successful in 2020. The Nintendo Switch accounted for 87% of Japan’s console sales in 2020, moving nearly 7 million units, and there was a time finding one that was not on the secondary market was almost impossible.
Now, as data has been collected for 2020, a clear picture is beginning to emerge showing that people were gaming quite a bit on consoles last year. Among hardware, software and services (PS +, Xbox Game Pass) on the console last year, total spending reached $ 53.9 billion; an increase of 19% over 2019. The breakdown shows that, although Nintendo appears to dominate the market, it was Sony that was at the top, with 46% of the total for the year. This is primarily attributed to its larger user base of 114 million console owners compared to the Switch at roughly 80 million. A growing percentage of the revenue pie on consoles is in the services area, with more attractive additions to PS Plus and Xbox Game Pass making those services more attractive.
The services area is expected to grow in 2021, and with the announcement that Xbox Game Pass will get a line of titles from Bethesda, it should be pretty apparent to see that great deals like this will bring customers into the subscription ecosystem. Xbox accounted for only about 23% of the $ 53.9 billion spent on consoles last year, so you surely expect to trim the lead a bit with some big acquisitions.
Gaming accessories already had a record January, so it looks like it’s not holding back the gaming industry. While the hope that the COVID-19 pandemic is close to ending is on the minds of many, the habits formed in 2020 are likely to continue to drive up console spending in 2021.