Video games are losing popularity to TikTok, gambling and porn reveals new report

Video games aren’t competing with movies and music any more, but with online gambling and OnlyFans, in a worrying new report.

It’s no secret that the games industry is in a difficult position at the moment. Video games are simultaneously more popular than ever and yet struggling to attract enough players to justify the enormous cost of making them, resulting in constant job losses, studio shutdowns, game cancellations, and even a company as big as EA needing to be bought out.

One obvious reason for this is that the industry saw massive growth during the coronavirus-induced lockdown, where everyone was confined to their homes, but afterwards many didn’t stick around – even though most Western publishers gambled that they would.

There’s also the fact that there are so many other entertainment avenues nowadays, vying for peoples’ attention, especially ones that arguably offer a greater sense of social interactivity, with a new report pointing to gambling, AI bots, and pornography as gaming’s main competitors.

This report comes from games industry advisory company Epyllion and breaks down a lot of market data that highlights how interest in gaming worldwide has dwindled since the pandemic. For example, spending on PC and console gaming in the US has dropped 8% in that time.

Epyllion argues that there are seven alternative interactive experiences that are stealing peoples’ attention from video games:

• Social video, including TikTok
• Creator pornography (think OnlyFans)
• AI assistants
• Crypto and memecoins
• Prediction markets
• Online sports betting
• iGaming and iCasinos (digital games that allow you to bet and win real money)

‘Video games not only compete with many new interactive substitutes, but video gamers face a barrage of new, interruptive, and irresistible notifications for these substitutes,’ reads the report.

You can see this in Epyllion’s data. For example, since 2019, spending on video game software in the US has risen by $12.9 billion (about £9.6 billion), but the country’s spending on OnlyFans content, online betting, and iCasinos has collectively risen by $31.6 billion (about £23.5 billion).

Elsewhere, Epyllion reports that more American men aged 18 to 45 are likely to use AI chatbots, use creator pornography, or take part in online gambling than they would play a video game, be it on consoles, PC, or mobile.

‘Video gaming’s post-pandemic problem isn’t that players choose to watch TikTok instead of buy a AAA video game or subscribe to OnlyFans instead of buying a PlayStation; it’s that on a Friday evening, players are placing a growing share of their time and spend elsewhere,’ says the report.

This problem is exacerbated by the fact that the video games market is dominated by a small number of live service games, like Fortnite and Minecraft, that are often five years old or more, making it difficult for new titles to break through.

We’ve seen it just this month with Highguard, but even established franchises are struggling to grow their audiences to the degree executives want. Take EA Sports FC 25, for example, which should’ve been one of EA’s main money makers for 2024 and yet reportedly underperformed.

So, what’s the solution? Considering the heightened sense of interactivity seen in conversing with AI chatbots and engaging with creator pornography, perhaps publishers will pursue a similar avenue and try to make games more personalised.

We’ve already seen Sony experiment with this, with an AI chatbot based on Horizon Forbidden West protagonist Aloy, making it so players can hold a conversation with her.

Sony has also submitted a patent that posits the idea of ‘LLM-based generative podcasts for gamers’ that would star PlayStation game characters and be personalised to your interests.

The concept of directly interacting with game characters in this manner does seem like the next evolution for the medium, but it’s not something any publisher has talked about openly yet.

Although there is an additional problem, in that gaming hardware may become increasingly difficult to manufacture over the coming years, as AI companies buy up all the components and little is left for gaming.

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