Electronic Arts closed a $55 billion deal to go private in August, led by Saudi Arabia’s Public Investment Fund. A month earlier, Microsoft said it would cut 3,200 jobs at Xbox and divest studios. Ubisoft, meanwhile, has been shutting studios. Livemint’s analysis reads these moves as the end of the expansion that the pandemic set off in the games business.
The boom, by the numbers
Lockdowns sent demand soaring. A 2022 PwC report put global video game revenue at $131.7 billion in 2019, $147.7 billion in 2020 and $214.2 billion in 2021.
Many in the industry assumed it would keep going. Low interest rates fed a buying spree: the Drake Star Global Gaming Report counted over 1,300 deals announced or completed in 2022 alone, worth $127 billion. About half of all billion-dollar gaming deals to date took place between 2020 and 2023, among them Microsoft’s $68.7 billion purchase of Activision Blizzard. Sweden’s Embracer Group bought more than a dozen companies as it tried to dominate the mid-market.
Then players drifted back to normal life. Engagement fell once pandemic restrictions eased, and revenue growth slowed.
Cuts and resets
Ubisoft announced a sweeping restructuring in January. It cancelled several unreleased games, closed studios and pulled development teams together around its best-known franchises. The company has reported losses in three of the past five years, and its shares have fallen 89% over that period. It also pushed major productions into 2028-29.
Analysts read EA’s move differently. Free of quarterly earnings scrutiny, the company may have room for long development cycles and new business models. Games industry researcher Joost van Dreunen told the Associated Press the change could give EA “a little bit more breathing room to do what they do.”
A new squeeze on hardware
Memory prices have also jumped in recent quarters. Samsung, SK Hynix and Micron have shifted capacity toward high-bandwidth and enterprise memory for AI data centres, leaving less for consoles and handhelds. Xbox CEO Asha Sharma wrote in June: “We are in a hardware component crisis. When I joined as CEO in February, the price we paid for console storage components was over 2 times as high as we paid last fall.”
Console makers already sell hardware on thin margins, often at or below cost. Microsoft has raised Xbox Series X/S prices several times, including a significant global increase in June 2026. Nintendo raised Switch 2 prices, citing “changes in market conditions.” Sony has lifted PlayStation 5 prices several times.
Sony is also trimming costs another way. New PlayStation titles will be digital-only from January 2028. Digital downloads made up about 78% of its full-game unit purchases in its latest financial year, and physical sales carry manufacturing, shipping and retailer costs that can absorb more than a fifth of the retail price.
India plays by different rules
India is mobile-first and built around free-to-play games, so it may weather the downturn differently. Niko Partners says the country’s video games market, excluding real-money gaming, passed $1 billion for the first time in 2025, reaching $1.04 billion. It forecasts nearly $1.2 billion in 2026 and $1.77 billion by 2030, about 11% annual growth. The player base topped 500 million in 2025, and 95% of those users play on mobile.
