According to trade body UKIE, the value of the UK video game market fell by 5.6% last year.
Gaming hardware sales, including consoles, fell 19% last year to £2.16 billion, but software (games) revenue increased slightly by 0.4% (£4.57 billion).
Overall, the market was worth £7.05 billion in 2022, which is still 17% higher than pre-pandemic levels.
The games industry, like the rest of the entertainment industry, is bracing for the impact of the recent cost of living crisis on consumer spending in the coming years.
According to the report, price changes caused by the Ukraine war, rising inflation, and higher energy costs have already had an impact on how much people are willing to spend on video games.
“We’re pleased to see the UK video games consumer market has maintained its growth trajectory,” said UKIE CEO Dr Jo Twist.
“Although we may have seen a natural leveling off following increased spending during the lockdown years,” she added, “it’s clear that the appetite for games and the surrounding culture in the UK remains strong.”