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US Consumer Spending on Video Games Jumped by 42% to $4.7 Billion in January 2021

On a global scale, there was a 15% increase in digital games revenue in January 2021, pushing the total to $11.6 billion. PC earnings increased by 31% year-over-year (YoY), console revenue by 24% and mobile earnings by 6%.

In the US, gaming revenue rose to an impressive high during the month thanks to the new generation of consoles. According to the research data analyzed and published by Safe Betting Sites, consumer spending across various gaming categories soared by 42% to $4.7 billion.

Video game hardware led the upsurge, growing by 144% from $131 million in January 2020 to $319 million in January 2021. The video game accessories segment had the second highest growth. It spiked by 73% YoY, going from $128 million to $222 million.

Consumer spending on software increased by 36% YoY, surging from $3.06 billion to $4.17 billion. The segment includes physical and digital game purchases as well as subscription spending.

Overall video game spending in the previous month had also set a new December record. According to an NPD report, there was a 25% YoY increase to $7.7 billion.

Hardware dollar sales rose by 38% to $1.38 billion, the highest December total since 2013 when revenue totaled $1.37 billion. Notably, that was when the PlayStation 4 and Xbox One made their debut. The December 2020 hardware revenue figure could have been higher if the supply constraints on both the PS5 and Xbox didn’t exist.

 

Nintendo Switch Lifetime Sales Soar to 80 Million

Nintendo’s Switch was the US best-selling console during the month of December 2020 while the PS5 came in second. For the holiday quarter as a whole, the console sold 11.57 million units, bringing its lifetime total to about 80 million according to Statista.

It is on track to surpass the Wii, which sold 101.63 million units during its lifetime. Its remarkable performance carried into 2021 as it was also January’s best-seller in terms of units sold. That marked 25 consecutive months for the Switch as the best-selling console in the US.

In terms of software sales, Nintendo Switch sold close to 76 million units during the holiday quarter. Animal Crossing: New Horizons and Mario Kart 8 Deluxe both surpassed the 30 million threshold for the first time. Pokemon Sword/Shield and The Legend of Zelda: Breath of the Wild each surpassed 20 million unit sales in the period.

Courtesy of the blockbuster holiday quarter, Nintendo’s profit for the first nine months of its fiscal year rose by 37% YoY. Its operating profit nearly doubled, growing by 98% in the same period.

Nintendo raised its fiscal year sales forecast for the Switch to 26.5 million units at the start of 2021. For the quarter ending on March 31, 2021, the company also raised its net profit estimate by 33%. Its new forecast is 400 billion yen ($3.82 billion).

 

US Video Game Industry Revenue Jumped By 27% to $57 Billion in 2020

For the US video games industry, 2020 saw one record after another broken in consumer spending during every quarter. In Q4 for instance, there was an increase of 26% YoY in total revenue to $18.6 billion, a new Q4 high.

Hardware spending during the quarter rose by 47% during the period, while software spending saw a 23% upsurge to $14.5 billion. Spending on accessories similarly had a double-digit increase, growing by 15% YoY.

Full year revenue for the region shot up by 27% YoY to reach $56.9 billion. Annual software spending increased by 26% YoY to hit $49 billion. Hardware spending rose by 35% on the year to $5.3 billion, the highest since 2011’s $5.6 billion. Spending on accessories surged 22%.

Additionally, overall spending on PC gaming hardware and accessories during the year rose by 62% YoY to $4.5 billion. The figure more than doubled the total sales recorded in 2017. PC gaming accessories revenue grew remarkably, at 81%, compared to hardware’s 57% growth. There was also an increase of 19% in PC gaming content, to $7.5 billion.

The massive growth in the PC segment was attributed to the fact that 40% of gamers in the US played PC games in 2020. Compared to 2019, that marked a 4% increase. They also increased the amount of time spent playing by 14%.

According to NPD, there will be a plateauing of demand at the new elevated level in 2021. PC gaming hardware and accessories sales are projected to grow by 3% in 2021.

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About Nica San Juan

About Nica San Juan

Nica is a BA Political Science graduate, startup founder and financial expert. She has an entrepreneurial spirit and started several startups from a young age, eventually becoming fascinated with stocks, cryptocurrencies and the blockchain economy. She specializes in financial tech and her expertise is in writing detailed tutorials and guides on how to invest in stocks and cryptocurrencies.