Now that 2020 is underway, it is time to dig into the results from both my January and September U.S. video game market predictions.
First, let’s start with the 2019 US Video Game Market Predictions piece in January.
My takeaway at the end of the piece was:
While achieving a similar level of growth the market experienced in 2018 is highly unlikely, it is reasonable to assume that the 2019 market will be relatively flat, or a few percentage points thereabouts. We should also expect the announcement of the next generation console successors from Sony and Microsoft in 2019, likely launching in 2020.
We certainly received the announcement of next generation hardware from both Sony and Microsoft, both planned to launch in 2020, so we’re off to a good start.
Total U.S. spending on video gaming across all categories of spend reached $41.5 billion, a decline of 1 percent when compared to the year prior, adjusted for the same number of weeks. While I was expecting growth, technically the prediction ended up being correct.
Moving to the bullet point predictions from January:
- Spending on digital content to account for 90 percent of total gaming content spending – Incorrect – Digital accounted for just over 85 percent of content spending in the year.
- In console hardware, Switch grows, leads market – Correct - Nintendo Switch was also the only in market Console platform to show year on year growth.
- Subscription spending continues to rapidly grow – Correct – The NPD Group is reporting double-digit percentage growth for subscription services in 2019. While this growth did not achieve the potential 40 percent upside forecast I’d called out in the predictions piece, this had more to do with promotional pricing rather than lower than expected adoption.
- 2018 success will lead to tough comps in console software & hardware – Correct – This was a market challenge for most of the year, but particularly in the holiday quarter. While several great games released in 2019, the slate just did not offer the same sales potential of 2018. Combine this with normal late console cycle dynamics and it made for challenging spending year.
- More focus on facilitating social hangouts in games – Correct – We saw more cross-play integration in the year, while titles such as Fortnite are redefining what in game events are, greatly expanding reach and engagement. Fortnite’s Marshmello concert and its season ending must watch events are just a few examples of what the future of gaming as entertainment and cultural hub may look like.
- Streaming offerings outpace consumer adoption – Correct – Cloud will become a bigger part of the gaming landscape over the next decade. However, initial consumer response has been tepid.
Overall, the January predictions ended up working out well.
In September, I followed up with a Year-End Expectations set of predictions. Spending in the first half of the year finished a bit ahead of where I’d thought it would be, which led to me raise my expectations for the year. Oops.
Let’s look at the September predictions:
- 2019 industry spending to grow 6 percent to $44.6 billion – Incorrect – I had it right in January. Overall spending fell 1 percent to $41.5 billion. Fourth quarter declines in hardware, accessories and PC content dragged the market lower than my September expectations.
- Content drives growth, gains $3 billion to $37.8 billion – Partially Correct – Content spending did grow in 2019, gaining 2 percent to $35.4 billion. A very tough fourth quarter comparable slate and late console cycle dynamics proved even more challenging than I’d expected in September.
- Top Title Predictions – Correct (enough) – I was able to predict 8 of the top 10 games, including each game’s ranking. However, two games surprised: Super Smash Bros. Ultimate finished the year at number 7 overall; Mario Kart 8 landed at number 10.
- Nintendo Forecast for a Big Holiday Quarter, drive highest hardware unit sales since Xbox 360 in 2011 – Correct – Nintendo Switch did indeed drive the highest hardware sales in a calendar year since the Xbox 360 in 2011.
- Subscriptions Sizzling, Streaming to Start Slow – Correct – As noted above, subscription spending growth reached double-digit percentage.
2019 Year U.S. Top 10 Games (Physical and Full Game Digital from the Nintendo eShop, PlayStation, STEAM and Xbox platforms for publishers in the Digital Leader Panel) ranked on dollar sales
|Rank||September Predicted||2019 Actuals|
|1||Call of Duty: Modern Warfare 2019||Call of Duty: Modern Warfare 2019|
|2||NBA 2K20||NBA 2K20|
|3||Madden NFL 20||Madden NFL 20|
|4||Borderlands 3||Borderlands 3|
|5||Mortal Kombat 11||Mortal Kombat 11|
|6||Star Wars Jedi: Fallen Order||Star Wars Jedi: Fallen Order|
|7||Tom Clancy's Ghost Recon Breakpoint||Super Smash Bros. Ultimate|
|8||Kingdom Hearts III||Kingdom Hearts Ill|
|9||Torn Clancy's The Division 2||Tom Clancy's The Division 2|
|10||Pokemon Sword||Mario Kart 8|
A few misses in the September predictions, particularly around fourth quarter spending. However, I’ll also likely never reproduce the top title predictions success, and other predictions finished right on target.
I’ll be publishing my 2020 predictions later this week.