Younger Americans are spending 25% less on video games today compared to the same period last year. This finding comes from a report by The Wall Street Journal, utilizing data from market research company Circana to scrutinize the spending habits of young Americans.
While spending among 18- to 24-year-olds fell by 13% from January to April 2025—particularly in categories such as accessories, technology, and furniture, which saw declines of 18%, 14%, and 12% respectively—video game spending experienced the most significant drop. This trend is not mirrored in older age groups, highlighting a unique shift among younger consumers.
Economic Pressures and Changing Priorities
The Wall Street Journal attributes this decline to a mix of economic challenges. Graduates are finding it increasingly difficult to secure employment, and credit card delinquency rates have surged, particularly among those aged 18 to 29, according to the New York Federal Reserve.
“Young grads are having a much tougher time finding jobs,” the report notes. “Student-loan payments are restarting for millions of borrowers. Over roughly the past year, credit-card delinquency rates have risen to their highest points since before the pandemic.”
Additionally, the report’s timeframe does not account for the June launch of the Nintendo Switch 2, which is expected to boost spending figures. Moreover, the anticipated release of Grand Theft Auto 6 next year is projected to set new records in consumer spending, not only in video games but across the entertainment industry.
Rising Costs in the Gaming Industry
Meanwhile, the cost of gaming has increased, with some publishers raising video game prices to $80, consoles becoming more expensive, and in-game monetization strategies growing more aggressive. Circana’s Mat Piscatella commented on social media that while people continue to engage with video games, they are increasingly turning to free-to-play options on devices they already own.
“People are still turning up to play video games,” Piscatella noted, “but engaging more with free-to-play on devices they already have access to.”
Industry Instability and Job Losses
This report emerges amidst significant instability in the gaming industry, despite record profits. In the first half of 2025 alone, approximately 2,800 game developers have lost their jobs, adding to the 14,600 cuts in 2024 and 10,500 in 2023.
Recent developments include Microsoft’s announcement of plans to lay off around 9,100 employees, with some cuts affecting its gaming division. This follows a series of layoffs in 2024, including the closure of Redfall developer Arkane Austin and Hi-Fi Rush developer Tango Gameworks, and a further reduction of 650 staff in September 2024. In May of this year, Microsoft reduced its workforce by 6,000, representing 3% of its entire staff.
In a message to employees, Xbox boss Phil Spencer acknowledged the timing of these changes, noting that they come at a time when Xbox has more players, games, and gaming hours than ever before.
“I recognize that these changes come at a time when [Xbox] have more players, games, and gaming hours than ever before,” Spencer stated.
Looking Ahead
As the gaming industry navigates these turbulent times, the upcoming launches of major gaming consoles and blockbuster titles may offer some relief. However, the underlying economic challenges faced by younger consumers suggest that spending habits may continue to evolve.
For now, the industry must grapple with the dual pressures of rising costs and shifting consumer priorities, while also addressing the broader economic factors influencing spending behaviors.
Photographer: Ariana Drehsler/Bloomberg via Getty Images.
Vikki Blake is a reporter for IGN, as well as a critic, columnist, and consultant with over 15 years of experience working with some of the world’s biggest gaming sites and publications. She’s also a Guardian, Spartan, Silent Hillian, Legend, and perpetually High Chaos. Find her at BlueSky.
