A decline in spending among consumers in the PC market has extended to related activities as luxury buys take a back seat.
Poor economic conditions globally, like high interest rates and inflation, have gamers keeping their wallets closed when it comes to buying new games and PC parts.
Market research firm Circana told Reuters that elevated inflation has forced gamers to get picky with the new games they choose, with many players only buying titles from their favourite franchises due to tighter budgets.
This increased frugality has meant an expected decrease in revenues for companies like games publisher EA.
In a statement, EA said that while Star Wars Jedi: Survivor, one of its latest games, “did well”, gamers have been spending much less on games like Apex Legends, an original IP.
“This quarter, net bookings were below expectations, largely driven by underperformance from Season 17 (of Apex Legends),” EA CFO Stuart Canfield said in a post-earnings call.
Apex Legends is a Fortnite-style online multiplayer battle royale shooter, completely free to play, but with in-game purchases. All of which is a formula for money-making, compared to Star Wars Jedi: Survivor, effectively a single-player narrative experience, traditionally seen as less profitable by big game companies.
The key in this, is the “Star Wars” branding. Circana said that EA’s bottom line was also affected by new competitors like Warner Bros Discovery, whose Hogwarts Legacy title, based on the Harry Potter universe, became one of the best-selling games this year.
Gamers were willing to spend big on sequels
Who else is making bank in 2023 you ask? Well, we have Diablo IV, the fourth sequel of the highly popular Diablo series of games, which quickly became developer Blizzard’s best-selling game to date.
The Legend of Zelda: Tears of the Kingdom sold 10 million units in just three days, becoming the fastest-selling Nintendo title of all time in the process.
Another sequel which also did well was Final Fantasy XVI, with developer Square Enix saying that its sales were “extremely strong.”
Meanwhile, Forspoken, another AAA game from Square Enix released this year, had “lacklustre sales.”
Forspoken does not have the cachet nor the existing fanbase of the Final Fantasy series, despite similar gameplay from the same developer. It is also a brand-new IP.
Original IPs that did manage to sell well this year include the likes of Bioshock-like Atomic Heart which managed $2 million in sales since February 2023. Surpassing all expectations for what is essentially an indie game.
In the Asia market, it sold close to 300 000 physical and digital copies, which are outside of its inclusion on Xbox Game Pass.
Wild Hearts, the Monster Hunter-like from Koei Tecmo also did well and enjoyed a “successful launch”, according to its publisher.
While both of these titles are similar to successful games in successful franchises of the past, they are also much cheaper than the likes of Forspoken, and many of EAs titles throughout the years.
A problem with pricing?
Atomic Heart goes for around R800 on PC compared to the much more expensive Forspoken at R1 429.
While we do not know what the exact sales figures are for Forspoken, the fact that Atomic Heart devs are happy with sales and Forspoken devs are not is indicative of what was spent making both games, and what profits they made.
But high prices do not bring pause to gamers, as the base edition of Diablo IV is among the most expensive games to buy ever thanks to high inflation. And yet people flocked to return to Sanctuary and take on Lillith.
So what is happening here? Apex Legends presented EA with disappointing numbers this year, and yet Atomic Heart managed to do well for its studio. Apex is an older title with a larger fanbase but still, both are original games with no attached franchises and neither are sequels.
It seems despite what Circana says, the gaming landscape continues to be more complex.
We would argue that gamers are a clued-in bunch, and this may be a stretch, but they are a group of consumers who are in the know. They will check for reviews, they will wait for discount sales, they will be swayed easily by social media movements (the popularity around the robot ballerina twins sent Atomic Heart into the mainstream, while Forspoken was consistently trashed online) but essentially, they know what they want and they will open their wallets for it.
And if publishers and developers are unable to bring that to them, they can expect their sales to decline.
[Image – Steam]
