Matthew Ball's State of Video Gaming 2026 report: global video game content sales grew 5.3% YoY to $195.6B in 2025 while job losses fell 40% YoY to 9,200 people
Private funding fell a further 55% last year, according to Epyllion's latest State of Video Gaming report
GamesIndustry.bizSophie McEvoy
Context & Ripple Effects
Gaming spending had been uneven: PC and console consumer spending declined in 2024, while the sector had already endured an exceptional wave of job cuts in 2023. The new report suggests a recovery in overall content sales alongside a still-constrained financing environment.
The funding contraction extends the pullback from the period when gaming startups had attracted multibillion-dollar quarterly investment totals through mid-2022. It matters because stronger consumer sales and easier access to development capital are moving on separate tracks.
First-order effects
Studios and game startups face a materially tighter private-capital market even as content sales improve, increasing the importance of existing cash flow and financing from publishers or platform holders.
The lower annual layoff total eases the pace of workforce contraction, but 9,200 job losses indicates that the industry’s employment reset remains active.
Second-order effects
Capital-rich publishers and platform holders gain relative leverage when independent studios have fewer funding alternatives, potentially shaping which projects receive financing and on what terms.
If consumer demand improves while private funding continues to fall, game development could become more concentrated among companies able to self-fund or secure strategic backing, with fewer paths for venture-backed entrants.
The sector may be settling into a more disciplined investment cycle in which project financing follows demonstrated demand rather than the broad startup funding conditions seen earlier in the decade.
The trend: Gaming is moving toward a split recovery: consumer spending is improving, but capital availability is increasingly determining which studios can participate in it.
The unrivaled @ballmatthew has released his 2026 “State of Gaming” deck/report. It's a crucial read. More than 160 slides! https://www.matthewball.co/... Matt focuses a lot on gaming's growth coming from outside of the U.S. (see: China) and a slowdown in player growth meaning [im…
Fascinating data on the challenges + growth areas of gaming: It's harder than ever for new games to compete, with older/entrenched games holding or growing share of playtime across all platforms Roblox dominates with kids and accounted for 2/3 of the entire industry's net new [im…
Matthew Ball's State of Video Gaming In 2026 deck has just soft-launched on his site. I've been digesting it as its editor, and given the layoffs and maturing in the industry, his exacting perceptions on where there's indisputable growth are more valuable now than ever.
Video games are under clear assault from novel forms of interactivity and which mostly emerged or scaled after 2019. Consider that in 2019, US spending on online sports betting was under $500MM, iGaming under $500MM, and OnlyFans under $250MM. They are now $33B combined. And [ima…
If you're a founder or developer, this will be one of the most important documents you will read this year. I think you will find the results shocking and cut through some of the noise on x 2 very interesting images from the report [image]
One of the most interesting aspects of the video game market's growth is... where it doesn't seem to be going (most gamemakers!). Since 2021, Roblox has captured more than 60% of total net growth in consumer spending outside China (67% in 2025!). It's now >4.5% of the market. [im…
How big was Roblox in 25? Well, it's catching up to Netflix for hours of use... about matches the combined playtime of the next largest gaming ecosystems.... and its top titles are as played as top non-Roblox games and even publishers (though they get a fraction of the revenue) […
My State of Video Games in 2026 is now out (Early Access) 1⃣ Why revenue growth is more elusive than headlines suggest 2⃣Why video gaming has been losing the attention war for a half decade (and to what) 3⃣ Where there's indisputable growth + Lots more https://www.matthewball.co/…
Excellent report! Fascinating to see the market broken down like this & the big changes that have already come. What will happen when there is even more shiny things to look at?
elievable and depressing take here re: “where has the gaming audience gone” - not just to tiktok and youtube but to kalshi, crypto trading, onlyfans, and talking to chatgpt — www.matthewball.co/all/presenta...
Sobering read about the state of the industry. “Games” have started to lose market share for the first time ever post-pandemic, primarily to other “interactive” entertainment like TikTok, OnlyFans, Kalshi, iGaming, etc. Sex and money rule the day. — www.matthewball.co/all/pre…
This week we'll get lots of discourse on the Epyllion games industry analysis www.matthewball.co/all/presenta... Take it with a grain of salt, but it hurts how it frames cassinos, bets, crypto & AI as things people do instead of gaming... Worth reading if you like this stuff, he…
Seeing the numbers in perspective makes me feel like pursuing game-making for money over art... is probably going to look embarrassing at best in 30 years. It's “Making an Artistic Statement via Games” vs. “Joining the Circle of Horror” imo... www.matthewball.co/all/presenta...