Zelda: Tears of the Kingdom Linked to 40% Drop in US Game Spending

Video game hardware spending in the United States took a significant hit in May 2024, dropping by 40% compared to the same period last year, according to data from Circana. This decline coincides with the impact of major game releases, particularly Nintendo's The Legend of Zelda: Tears of the Kingdom, launched in May 2023.

Impact on Hardware and Game Sales

Sales of Nintendo Switch, PlayStation 5, and Xbox Series X/S all saw double-digit percentage declines year-on-year up to May. Nintendo Switch experienced the most notable drop, which industry analyst Mat Piscatella attributes partly to the successful launch of Tears of the Kingdom last year. The game's popularity contributed to a decrease in spending, despite the launch of a themed Switch OLED model alongside it.

PlayStation 5 emerged as the leading console in terms of both unit sales and dollar revenue for May, surpassing its predecessor PlayStation 4 by eight percent in unit sales.

Broader Market Trends

The decline extended beyond hardware, affecting spending on game content such as games, in-game currency, and items, which fell by three percent compared to the previous year. Similarly, purchases of gaming accessories dropped by eight percent, with PlayStation Portal ranking as the top-selling accessory in May.

Ghost of Tsushima, previously exclusive to PlayStation consoles, achieved significant success following its PC port release, becoming PlayStation's largest single-player PC launch in terms of concurrent players.

Free-to-play games like Fortnite continued to dominate, boasting the highest number of active users across PlayStation 5 and Xbox Series X/S in May. This underscores their sustained popularity compared to new full game releases.

Future Outlook

Looking ahead, Piscatella forecasts a projected six percent decline in total US spending on video game hardware, content, and accessories for May 2024 compared to the previous year. The launch impact of Tears of the Kingdom in May 2023 remains a contributing factor to this decline, marking it as one of the fastest-selling Zelda releases with over 10 million units sold globally in just three days.

Nintendo, Sony, and Microsoft are gearing up for future hardware releases. Microsoft has unveiled three new Xbox console variants with increased storage capacities slated for release later this year. Meanwhile, Sony plans to introduce a PS5 'Pro' model capable of running games at 60fps with ray-tracing technology.

Nintendo will announce the successor to the Switch, dubbed Switch 2, by the end of the 2024-2025 financial year, aiming for a 2025 release. The year ahead promises major game launches across platforms: Legend of Zelda: Echoes of Wisdom for Switch in September, Astro Bot for PS5 in the same month, and Indiana Jones and the Great Circle for Xbox and PC in 2024.