Video game sales are declining in the U.S., but one analyst sees a 2023 rebound.

Video games They are headed for a decline in US sales in 2022, but a slowing recession and new releases could lead to a rebound in 2023, one analyst said.

Stifel analyst Drew Crum predicts that US video game sales will decline 6% to $57 billion in 2022. That contrasts with a 2% growth estimate from video game data research firm Newsoo, Crum said.

Meanwhile, IDC analyst Lewis Ward said global video game-sector sales are expected to grow 0.4% year-over-year to $275 billion. The IDC analyst included data that some analysts don’t, such as mobile games ad revenue, which Ward expects to grow 13 percent annually to $36.2 billion globally.

Read: The epidemic in video games is expected to disappear by 2022

In the year 2022 is always expected to be a weak year, compared to 2021’s pandemic-driven sales. Not only does that make 2023 comps slightly better, but Crum says that video games are also on the upside as they become entertainment during the recession.

“We see video games as a low-cost form of entertainment that should ‘sustain’ in times of macro weakness, and companies that develop and launch compelling content are more likely to engage and monetize their respective player communities,” Crum said.

Crum thinks the sector’s revenue could grow by 2023, with US-based third-party console publishers seeing growth of 40% or more.

That reflects “stronger and lighter comps than Activision Blizzard Inc. and a stronger slate and full year contributions from Zynga for Take-Two Interactive Inc.,” Crum told Take-Two TTWO.
One of the choices is because 24 immersive titles are slated for release between 2023 and 2025.

Read: Take-Two’s ‘Grand Theft Auto VI’ Hack: Severity Depends on Source Code Taken, Analysts Say

The Stifel analyst said Electronic Arts Inc.
It should also hold up well because of the composition of the portfolio, “Sports, which accounts for more than 60% of the company’s net bookings, is a genre that is sustainable in nature and therefore more consistent in the so-called ‘hit-driven biz.'” Crum has a buy rating at EA, and a buy rating at Activision. At ATVI,
Microsoft Corporation considers acquiring MSFT;
It’s a done deal.

Crum undercuts Ubisoft Entertainment SA’s UBI;
The company’s outlook is expected to be “overly ambitious” and its recent increase in ownership stake in Tencent Entertainment Co. Ltd. 419,
It reduces the chances of getting it soon.

Year-to-date, Take-Two shares are down 35% and EA shares are down 11%, while Activision shares, which have spent most of the time waiting to close on the Microsoft acquisition, are up 16%. Ubisoft’s shares traded down 29 percent on the Paris Stock Exchange. In comparison, the S&P 500 index SPX;
It fell 21%, and the tech-heavy Nasdaq Composite Index COMP;
It’s down 29 percent this year.

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