(Reuters) - Personal computing and console gaming revenue growth is expected to remain below pre-pandemic levels through 2026 as gamers record fewer hours of playtime, according to research firm Newzoo.
The market is expected to grow 2.7% from 2023-end to 2026, below the 7.2% growth rate from 2015 to 2021, according to the report.
Gamers have been recording fewer hours of play, with the average quarterly playtime falling 26% from 2021 to 2023.
The trend is expected to continue this year due to weaker gaming release schedules, with playtime falling around 10% in January.
"Slower player growth rates will impact the industry's capacity to 'expand the pie' via net organic growth," Newzoo said.
Japan's Sony (NYSE:SONY) Group had said in February it does not expect to release any new major franchise titles such as "God of War" and "Marvel's Spider-Man" in the coming fiscal year.
The company also cut full-year sales forecast for its PlayStation 5 consoles due to weaker-than-expected sales during the holiday season.
Industry giants such as Sony, Tencent Holdings (OTC:TCEHY)' Riot Games and Electronic Arts (NASDAQ:EA) have also laid off hundreds of employees this year and scaled back operations.
Gaming industry consolidation is another trend in focus with fewer publishers and a small group of games scooping up a large share of player engagement.
In each month of 2023, between 28 and 34 publishers commanded 80% of monthly active users, a publisher count which has been falling since 2021, the report said.
At the same time, five popular titles like Epic Games' "Fortnite", "Roblox", "League of Legends", "Minecraft" and "Grand Theft Auto V" had captured 27% of all playtime last year.
Fortnite and Roblox, in particular, have been thriving due to their games-as-a-platform model, which allows players and creators to add content to the game, allowing the platforms to "stay ahead of the content treadmill", according to Newzoo.