Video Game Revenue Hits $195.6B High as Private Funding Plummets 55%

Video game revenue hit a new high as funding crashed

Global video game content sales grew 5.3% to $195.6 billion in 2025, according to the latest State of Video Gaming 2026 report from Epyllion CEO Matthew Ball. This marks a new revenue high for the industry after three years of growth.

Private funding, however, fell another 55%. The final quarter of 2025 saw just 40 deals, with less than $100 million in pre-seed investments and over $200 million in early-stage funding.

Layoffs slow but outsourcing surges

Layoffs continued, with 9,200 people losing their jobs in 2025. That figure is 40% lower than in 2024, but the four-year total now stands at nearly 44,000.

Almost half of all redundancies between 2022 and 2025 occurred in California. The rest were distributed globally, with 18% in the rest of the US, 16% in Europe, and 19% across APAC, China, the Middle East, and Africa.

Outsourcing now makes up 35.5% of developers' total content investment, up from 30.6% in 2017. The report notes an "increasing reliance on outside partners for core creative work" like art, design, and engineering.

• Outsource users report that 60% to 95% of work in areas like animation and environmental design is handled externally.
• The top reason for outsourcing in 2025 was "flexible skillset," followed by the ability to "build more content" and "access hard-to-find skills."

Major titles built on external work

High-profile games are increasingly dependent on this model. Team Cherry's Hollow Knight: Silksong had just three internal credits compared to 94 external ones.

Pocketpair's Palworld had 97 internal credits and 93 external credits, with 80 of those external credits coming from a single partner, Keywords Studios.

Console and PC spending trends diverge

Consumer spending on console reached $41.6 billion in 2025, a modest 2.3% increase over 2020. However, 119% of the net spending growth since 2020 went to platform services like PlayStation Plus and Xbox Game Pass.

This means spending on actual console game sales and transactions was down nearly 11% year-on-year.

PC spending showed stronger growth, up 30% since 2020 to reach $40.7 billion in 2025. China is a critical market, accounting for 20% of global player spend.

Ball suggests that "if a game maker wants to 'match' global growth, they must win China (or grow 1.6 times the market elsewhere)." Chinese publishers have captured roughly half of the global growth in player spending since 2019.

Roblox dominates market growth

One platform was the standout driver of the entire market in 2025: Roblox. It captured a staggering 67% of the video game industry's net growth for the year.

By the end of 2024, Roblox already had more daily active users than PlayStation, Switch, or Xbox. In 2025, its daily active user count grew another 69%.

The platform now sees over 10 billion monthly engagement hours, which is more than Steam, PlayStation, and Fortnite combined.

The five key growth areas for 2026

Looking ahead, Ball identifies five major revenue growth areas for video games in 2026:

• Non-core markets
• Advertising
• Direct-to-consumer and alternative payment channels
• External development (outsourcing)
• Roblox