A recent report from Epyllion, led by market expert Matthew Ball, dives into the current state of the video game industry. It reveals that gaming is losing ground to other activities like gambling, cryptocurrency, and adult content.
This 164-page report highlights changes in consumer spending in eight key video game markets: the USA, Japan, South Korea, UK, Germany, France, Canada, and Italy. Before the pandemic, these countries accounted for over 60% of gaming expenditure. However, post-pandemic trends show a decline in gaming participation across nearly all regions. In the US alone, around 2.5 to 4% of gamers have stepped back from playing. The Canadian Trade Association indicated that about one in six players have also stopped playing since the pandemic began.
This drop in active players has led to decreased spending. In the US, expenditures on PCs and consoles fell by 8% since 2020, equaling approximately $2.3 billion. While mobile gaming saw some growth, it has stabilized since 2025, now surpassing console spending.
Overall, spending in the “Major Market 8” fell by $4.8 billion for consoles and PCs, with mobile gaming also down by $2.3 billion. Interestingly, five of the eight markets have reported record-high spending, but this money seems to be flowing into other areas, such as Roblox, which accounts for 67% of the industry’s growth.
So why is this shift happening? The report connects the fall-off in gaming to emerging interests in several other mediums. Social media, adult content, AI applications, and online gambling are capturing more attention. For instance, TikTok consumption in the US increased by 39 million hours per day compared to pre-pandemic numbers. In 2025, Americans spent around $5 billion on platforms like OnlyFans.
Cryptocurrency also found its way into people’s wallets, diverting funds away from gaming at a time when the industry stagnated. AI programs focused on role-playing and creative content are rapidly popular. Recent data shows nearly one billion installs of these apps globally.
Prediction markets, where users can wager on real-world events, surged in popularity as well. By late 2025, users were placing 1.5 million bets daily. The growth of online sports betting has been staggering; net losses in the US exceeded $17 billion in 2025, a massive increase from previous years. Even globally, the losses related to sports betting hit about $53 billion annually.
Additionally, iGaming—the online casino sector—has expanded significantly and is now twice the size of mobile casino games. iGaming now represents 21% of all video game spending in the US. Worldwide, legal iGaming losses total $54 billion each year, accounting for 45% of global gaming expenses.
The report notes a critical insight: “The challenge for video gaming post-pandemic isn’t just that players are drawn to TikTok or OnlyFans; it’s that they are increasingly spending their time and money elsewhere on Fridays and weekends.”
