Global video game content sales grew 5.3% to $195.6 billion in 2025, while private funding fell another 55%.
This is according to the latest State of Video Gaming 2026 report, published by Epyllion CEO Matthew Ball. The report noted that while the industry saw three years of growth and a new revenue high in 2025, funding continued to decline.
There were 40 deals in total in the last three months of 2025, with less than $100 million of pre-seed investments and over $200 million in early-stage funding.
Layoffs continued to affect the industry, with 9,200 people losing their jobs last year. This was 40% less than in 2024, but the four-year total of layoffs reached nearly 44,000.
Almost half of the redundancies occurred in California between 2022 and 2025, with 18% in the rest of the US. 16% were in Europe, while 19% were in the APAC region, China, the Middle East, and Africa.
In 2025, outsourcing made up 35.5% of developers’ total content investment, up from 30.6% in 2017 and 31.5% during COVID-19.
The report noted an “increasing reliance on outside partners for core creative work,” including art, game design, and engineering. Outsource users said that 60% to 95% of work in areas like animation, audio, and environmental design is outsourced.
“Flexible skillset” was the top reason for using external development service providers in 2025, followed by the ability to “build more content” and “access hard-to-find skills.”
Team Cherry’s Hollow Knight: Silksong and Pocketpair’s Palworld were two titles that relied heavily on outsourcing. According to the report, there were three internal credits for Silksong, compared with 94 external credits, while Palworld had 97 internal credits and 93 external credits, the latter including 80 from Keywords Studios.
The report also examined worldwide consumer spending on video game content for console and PC.
Consumer spending on console reached $41.6 billion, 2.3% above $41.1 billion in 2020. The report noted that 119% of net spending growth since then went to platform services like PlayStation Plus, Xbox Game Pass, and Nintendo Switch Online.
However, total spending on console game sales and transactions was down nearly 11% year-on-year.
For PC, global consumer spending grew 30% since 2020, reaching $40.7 billion in 2025, up from $31.4 billion.
China accounts for 20% of global player spend, with Epyllion CEO Matthew Ball suggesting that “if a game maker wants to ‘match’ global growth, they must win China (or grow 1.6 times the market elsewhere).”
Overall, Chinese publishers have captured roughly half of the global growth in player spending since 2019.
One platform that saw major growth in 2025 was Roblox, becoming the “singular driver of the total video game market” and capturing 67% of net growth.
By the end of 2024, Roblox had more daily active users (DAU) than PlayStation, Switch or Xbox. In 2025, this was up another 69%.
The platform has also reached over 10 billion monthly engagement hours, more than Steam, PlayStation, and Fortnite combined.
Looking ahead, Ball suggests that the five biggest revenue growth areas for video games in 2026 will be: Non-core markets, advertising, direct-to-consumer and alternative payment channels, external development, and Roblox.
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