The video game industry is booming, but not without its challenges. Global game content sales reached an impressive $195.6 billion in 2025, marking a 5.3% increase. But here's the catch: private funding took a significant dive, dropping by 55% according to Epyllion's insightful report, 'The State of Video Gaming 2026'.
This report, authored by Epyllion CEO Matthew Ball, highlights a fascinating trend. Despite the industry's growth and a record-breaking revenue year in 2025, funding sources are drying up. In the last quarter of 2025 alone, there were 40 deals, but pre-seed investments were under $100 million, while early-stage funding exceeded $200 million.
The industry's financial shifts have had a human cost. Layoffs have been prevalent, with 9,200 jobs lost in 2025, a 40% decrease from 2024. Yet, the total job losses since 2022 have reached a staggering 44,000. California bore the brunt, accounting for almost half of these redundancies, while the rest were spread across the US, Europe, and the APAC region, China, the Middle East, and Africa.
Outsourcing is on the rise, with developers increasingly relying on external partners for creative tasks. In 2025, outsourcing constituted 35.5% of developers' content investment, a notable increase from 2017 and the COVID-19 period. This trend is exemplified by games like Team Cherry's Hollow Knight: Silksong and Pocketpair's Palworld, which had a majority of their credits attributed to external contributors.
Consumer spending on console games reached $41.6 billion, a slight increase from 2020, but with a twist. Platform services like PlayStation Plus and Xbox Game Pass have been the primary beneficiaries, capturing 119% of net spending growth. Meanwhile, spending on console game sales and transactions has decreased by 11% year-on-year.
PC gaming, however, is thriving, with global consumer spending rising to $40.7 billion in 2025, a 30% increase since 2020. China's influence is undeniable, representing 20% of global player spend. As Ball suggests, China is the key to matching global growth for game makers.
Roblox has emerged as a powerhouse, driving 67% of the total video game market's net growth in 2025. Its daily active users surpassed PlayStation, Switch, and Xbox combined by the end of 2024, and this number soared by another 69% in 2025. With over 10 billion monthly engagement hours, Roblox's success is undeniable.
Looking forward, Ball predicts five key areas for revenue growth in 2026: non-core markets, advertising, direct-to-consumer strategies, external development, and, of course, Roblox. But will these predictions hold true? And what does this mean for the future of gaming? Share your thoughts in the comments!
