The gaming industry hit 195.6 billion in 2025, up 5.3%, finally eclipsing its pandemic peak from four years earlier. But dig into the numbers and a different picture emerges: almost all of that growth came from two places.
China generated nearly 4 billion of the roughly 10 billion added since 2021, with another 1.5 billion from Chinese-developed games sold internationally. Black Myth and: Wukong mobile hits like Last War: Survival stopped being regional phenomena and became global names. Meanwhile, Roblox kept breaking concurrent-user records and turned user-generated content into an economic engine that drives most of the non-China growth. "China is eating the video games industry," Matthew Ball wrote in his just-released "State of Video Gaming 2026" report from Epyllion.
Traditional Western publishers actually saw their packaged games and microtransactions shrink from 34.2 billion to 30.5 billion. Private investment in game startups cratered 55%, and pre-seed funding fell below 100 million in the final quarter of 2025. Operating profits have been sliding since 2019. The old model — billion-dollar single-player blockbusters funded by venture capital — is fading fast.
The divergence showed up in the January 2026 U.S. numbers from Circana too. Total spending rose 3% to 4.3 billion, but subscriptions jumped 23% while mobile actually declined 1%. Console grew 2%, PC 1%. The lift came entirely from recurring revenue streams, not one-time purchases.
Ball identified five growth engines for the year ahead: emerging markets, in-game ads, direct-to-consumer channels, external partnerships, and Roblox. Grand Theft Auto VI lands in November. Nintendo Switch 2 is already breaking sales records. Circana projects U.S. spending will reach 62.8 billion this year, another 3% climb.
Electronic Arts is reportedly in advanced talks for a 52.5 billion buyout. It would be the largest gaming acquisition ever. That kind of number doesn't come from building the next blockbuster — it comes from buying a catalog. The deal hasn't been confirmed, so the number could still fall through.
The industry isn't shrinking. U.S. spending projections sit at 62.8 billion for 2026, according to Circana.
