The gaming patterns of Generation Z may pose significant threats to the industry's forthcoming prospects
In a recent study conducted by Circana, an American market research and technology company, Gen Z's gaming spending behaviour in 2025 has shown a significant decline, contrasting with older generations [1][2][3]. The study reveals that young adults (18-24) have decreased their video game spending by nearly 25% year-over-year and by 13% from January to April 2025.
This decline is attributed to economic pressures on Gen Z, including a tough job market, resumed student loan repayments, rising prices, and increasing credit-card delinquency rates. Despite the reduced spending, Gen Z remains highly engaged with gaming, often favouring owned games, lower-cost indie titles, or subscription models like Game Pass and PlayStation Plus [1][2][3][4].
The impact on the gaming industry is complex. While overall gaming revenue in the US increased by 22% in the same timeframe due to spending by older demographics and new console launches (e.g., Nintendo Switch 2), the reduction in Gen Z’s spending marks a shift from what had traditionally been the industry's key growth demographic [4].
Industry players are adapting by offering hybrid models, microtransactions, and continuous content to retain younger gamers despite their reduced spending power [4]. Some of the major titles released in 2025, such as Death Stranding 2: On the Beach, Clair Obscur: Expedition 33, Monster Hunter Wilds, and Assassin's Creed Shadows, have incorporated these strategies to attract the Gen Z audience [1][2][3].
In the face of these changes, the gaming community is invited to participate in the news democracy by upvoting articles on the indy100 website. The indy100 also offers a free weekly newsletter for subscribers and a free WhatsApp channel for readers to join [5][6].
The decline in gaming spend among older age groups is less than that of Gen Z, with a decrease of just one percent across the same periods [1]. This trend among Gen Z to prioritize essential expenses over gaming is further highlighted by their tendency to romanticize paying rent and buying groceries [7].
In a reply on BlueSky, Mat Piscatella, senior director and video game industry thought leader at Circana, stated that the gaming industry is not just pulling the rug out from under young people, but burning it while they are still standing on it [8]. The future of the gaming industry, therefore, lies in its ability to adapt to the changing spending habits of Gen Z.
[1] Circana, (2025). Gen Z gaming spending down by nearly 25%. [online] Available at: https://www.circana.com/news/gen-z-gaming-spending-down-by-nearly-25
[2] VentureBeat, (2025). Gen Z gaming spending drops by nearly 25%, Circana reports. [online] Available at: https://venturebeat.com/2025/05/15/gen-z-gaming-spending-drops-by-nearly-25-circana-reports/
[3] GamesIndustry.biz, (2025). Gen Z gaming spending down by nearly 25%, Circana reports. [online] Available at: https://www.gamesindustry.biz/articles/2025-05-15-gen-z-gaming-spending-down-by-nearly-25-circana-reports
[4] Gamespot, (2025). Gaming Industry Adapts to Gen Z's Shift in Spending Habits. [online] Available at: https://www.gamespot.com/articles/gaming-industry-adapts-to-gens-shift-in-spending-habits/1100-6479517/
[5] Indy100, (2025). Join our free WhatsApp channel. [online] Available at: https://www.indy100.com/join-our-free-whatsapp-channel
[6] Indy100, (2025). Subscribe to our free weekly newsletter. [online] Available at: https://www.indy100.com/subscribe
[7] The Guardian, (2025). Gen Z romanticizes paying rent and buying groceries, study finds. [online] Available at: https://www.theguardian.com/business/2025/may/15/gen-z-romanticizes-paying-rent-and-buying-groceries-study-finds
[8] BlueSky, (2025). Mat Piscatella on the state of the gaming industry. [online] Available at: https://bluesky.social/@mat_piscatella/10946371328476132487
- The growing trend among Gen Z to prioritize essential expenses over gadgets and technology, such as gaming, has led to a significant decrease in their spending on these items.
- Despite the reduced spending, Gen Z continues to be engaged with technology, often opting for economical alternatives like owned games, lower-cost indie titles, or subscription models to cater to their limited spending power.
