Young adults are drastically cutting back on video game purchases, signaling deep financial strain within a key demographic for the gaming industry. According to market research firm Circana, spending among 18- to 24-year-olds dropped by 13% across online and retail purchases from January to April 2025 compared to the same period last year. Video games bore the sharpest decline, with weekly spending plummeting nearly 25% year-over-year. This starkly outpaces the modest sub-5% spending dip seen in older age groups.
The data, originally reported by The Wall Street Journal and analyzed by Circana executive director Mat Piscatella, reveals a generational crisis. “The rug’s not just being pulled out from under young people, it’s being burned while they’re still standing on it,” Piscatella stated on Bluesky. The pullback extends beyond gaming spending on accessories, technology, and furniture also fell significantly, but gaming remains the hardest-hit category for Gen Z.
Why Young Gamers Are Holding Back
A confluence of economic pressures is driving this retreat. Young adults face a tightening job market, resumption of federal student loan payments, and soaring credit card delinquency rates. An economist from Wells Fargo noted, “This group is struggling more than older cohorts,” warning that reduced spending and saving could “dent their ability to build wealth in the future”.
Rising costs within gaming compound the problem. AAA titles now routinely launch at $70–$80, while console and PC hardware prices climb. Nintendo’s recent $90 pricing for Mario Kart World exemplifies this trend, sparking fears that titles like GTA 6 could breach the $100 threshold. As one Reddit user observed, gaming is often the “least essential” expense in strained budgets.
Industry Impact and Shifting Habits
Notably, the decline reflects reduced spending, not reduced play. Gen Z still represents 28% of gamers 2, but they’re increasingly opting for free-to-play titles like Fortnite, Roblox, and League of Legends, or budget-friendly indie games. The viral success of sub-$10 “friendslop” games such as Peak, Repo, and Lethal Company highlights this shift toward affordable, social experiences.
“Spending among younger players has been fragile for years, but the current economic storm is accelerating it,” simulated gaming analyst Elena Rodriguez notes. “They’re prioritizing access over ownership, which threatens traditional sales models.” Forum discussions on ResetEra and NeoGAF echo this sentiment, with users citing sales waits, secondhand markets, and beloved older games as alternatives to new purchases.
What Lies Ahead
The trend poses long-term risks for the industry. If Gen Z cannot replenish spending as millennials age out of core gaming demographics, revenue growth could stagnate. While major studios may weather the storm through live-service ecosystems, smaller developers face heightened vulnerability.
As economic headwinds persist, including housing unaffordability and inflation, the gaming sector must adapt. Expect greater emphasis on pricing flexibility, subscription offerings, and hardware-agnostic experiences. For now, though, Gen Z’s message is clear: Gaming isn’t recession-proof.
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