adminThe global video game market generated $195.6 billion in content sales in 2025, a 5.3% increase that marked a third consecutive year of growth. Yet the industry’s revenue gains came alongside a sharp drop in private funding, continued job cuts, and a growing dependence on external development partners.
These figures come from the State of Video Gaming 2026 report, published by Epyllion CEO Matthew Ball. Its data covers investment, employment, outsourcing, and consumer spending across console and PC gaming.
Image credit: Alexandre Schrammel via Unsplash
Global video game market growth and funding trends
Although content sales reached a new high in 2025, private funding fell by a further 55%. In the final three months of the year, the report recorded 40 deals: pre-seed investments totaled less than $100 million, while early-stage funding exceeded $200 million.
These figures show why headline sales growth does not necessarily mean that financing is improving across the industry. For studios and investors, funding conditions and consumer revenue are separate indicators worth tracking.
Layoffs and the expanding role of outsourcing
About 9,200 people lost their jobs in the video game industry in 2025. That was 40% fewer layoffs than in 2024, but total job losses over the four years reached nearly 44,000. Almost half of the redundancies recorded from 2022 to 2025 were in California. The rest of the US accounted for 18%, Europe for 16%, and the APAC region, China, the Middle East, and Africa for 19%.
Outsourcing represented 35.5% of developers’ total content investment in 2025, compared with 30.6% in 2017 and 31.5% during the COVID-19 period. The report describes increasing reliance on external partners for core creative work, including art, game design, and engineering. Among studios using outsourcing, 60% to 95% of work in areas such as animation, audio, and environmental design was handled externally.
Image credit: Epyllion
Developers cited flexible skillsets as the leading reason for using external development services, followed by the ability to create more content and access hard-to-find skills. The report lists Team Cherry’s Hollow Knight: Silksong and Pocketpair’s Palworld as examples. Silksong had three internal credits and 94 external credits. Palworld had 97 internal credits and 93 external credits, including 80 from Keywords Studios.
Console and PC spending in 2025
Consumer spending on console content reached $41.6 billion, 2.3% above the $41.1 billion recorded in 2020. The report says platform services—including PlayStation Plus, Xbox Game Pass, and Nintendo Switch Online—accounted for 119% of net spending growth over that period. Meanwhile, spending on console game sales and transactions fell nearly 11% year over year.
PC spending followed a different path: it increased 30% from 2020 to reach $40.7 billion in 2025, up from $31.4 billion. China accounted for 20% of global player spending. Matthew Ball noted that matching overall market growth would require a game maker to succeed in China or grow 1.6 times as fast elsewhere. Chinese publishers captured roughly half of global player-spending growth since 2019.
Image credit: Epyllion
Roblox and the outlook for 2026
Roblox was a major contributor to market growth in 2025, capturing 67% of net growth and described in the report as the single driver of the total video game market. By the end of 2024, it had more daily active users (DAU) than PlayStation, Switch, or Xbox; its DAU increased by a further 69% in 2025. The platform also surpassed 10 billion monthly engagement hours, more than Steam, PlayStation, and Fortnite combined.
Looking ahead, Ball identified five major potential revenue growth areas for 2026: non-core markets, advertising, direct-to-consumer and alternative payment channels, external development, and Roblox. These are areas to watch, rather than guaranteed outcomes. Together, the findings suggest that the global video game market is growing, but that investment, employment, and the sources of consumer spending remain uneven.
