The State of Video Gaming in 2026 by Matthew Ball | Epyllion

By Matthew Ball

The State of Video Gaming in 2026 (Or “Growth and Where to Find It”)

Last Update: May 15, 2026 www.epyllion.co

Chapter I: Spending Growth but More Retrenchment and Margin Struggles in 2025 Chapter II: Why Growth is Scarcer Than Headlines Suggest

[Pages 2 – 14]

[Pages 15 – 42]

Chapter III: Video Games Are Losing the Attention War in the “Major Market 8”

[Pages 43 – 64]

Chapter IV: The Novel Interactive Competitors Taking Attention, Time, and Spend from Video Games Chapter V: The Five Biggest Areas of Revenue Growth in the Video Game Industry in 2026 Chapter VI: Closing Thoughts on the “Industry” and Finding Growth in 2026 Credits and Sources

[Pages 165 & 166]

[Pages 65 – 88] [Pages 89 – 157]

[Pages 158 – 164]

Global video game content sales had a strong 2025, growing 5.3% year a new all -time high of about $195.2B (~$9.7B above the prior high in 2021)

-over-year and hitting

Worldwide Consumer Spending on Video Game Content (Nominal Prices; Console + PC + Mobile; Excludes Hardware & Accessories; Includes Game Sales, DLC, Microtransactions, Subscri

pti ons, and Services)

$200B $180B $160B $140B $120B $100B $80B

$60B $40B $20B $0B

1990

Epyllion’s State of Video Gaming in 2026

1995

2000

2005

2010

2015

Sources: Ampere, Bloomberg, CADPA, IDG Intelligence,

2020

2025

Newzoo , Niko Partners, Sensor Tower, Epyllion analysis

This industry high was achieved through new highs in each of Mobile, PC, and Console, too

Worldwide Consumer Spending on Video Game Content (Nominal Prices; Console + PC + Mobile; Excludes Hardware & Accessories; Includes Game Sales, DLC, Microtransactions, Subscri

pti ons, and Services)

$200B Mobile PC

$180B

Console

$160B $140B $120B $100B $80B

$60B $40B $20B $0B

1990

Epyllion’s State of Video Gaming in 2026

1995

2000

2005

2010

2015

Sources: Ampere, Bloomberg, CADPA, IDG Intelligence,

2020

2025

Newzoo , Niko Partners, Sensor Tower, Epyllion analysis

And fortunately, 2025 as with years prior, boasted several new hit franchises and studios, while many older franchises and studios achieved new heights

Epyllion’s State of Video Gaming in 2026

But despite three straight years of industry growth, a new record high for revenues, and a smattering of new hits each year, private funding for gamemakers fell another 55% in 2025 Worldwide VC and Private Equity Funding In Video Gaming Content Development Studios/Publishers by Quarter (Nominal Prices; Excludes Investments In Video Game

-Related Technology and Delivery Companies)

$1.4B

210 Pre -Seed Deal Count

$1.2B

Capital Raised

195

Early Stage

180

$1.1B

165

$1.0B

150

$0.9B

135

$0.8B

120

$0.7B

105

$0.6B

90

$0.5B

75

$0.4B

60

$0.3B

45

$0.2B

30

$0.1B

15

$0.0B

2017

Epyllion’s State of Video Gaming in 2026

2018

2019

2020

2021

2022

2023

2024

2025

Deals

$1.3B

0

Source: Pitchbook

The major gamemakers also continued to whittle their portfolios, cancelling even more of their pipeline in 2025 and shutting down scores of still -operating titles

Epyllion’s State of Video Gaming in 2026

With budgets cut and funding scant, layoffs continued. 2025 was 40% lighter than 2024, but the year still saw some 9,200 losses and brought the four -year total to nearly 44,000 Annual Gross Reported Layoffs in the Video Game Industry (Not Net of Hiring) New All -Time High ▼ 15,650

New All -Time High ▼ 10,500 New All -Time High ▼ 8,500

2022 Epyllion’s State of Video Gaming in 2026

9,200

2023

2024

2025 Sources: Amir Satvat / Always Supporting the Gaming Community

And while hiring has returned (ASGC tracked over 13,000 open postings at the end of 2025), these jobs are highly and increasingly concentrated in lower cost markets Video Game Industry Layoffs

Video Game Industry: Open Roles

(Global; 2022 – 2025; As Tracked) Central, Latin, and South Americas, plus Caribbean

4%

APAC, China, Middle East, and Africa

19%

Europe

North America (Excl. California)

(Global; As Tracked)

15%

16%

1% 5%

APAC (Excl. China)

25%

China

22%

Europe

9%

North America (Excl. California

14%

13%

North America (California )

Mid-2024

Mid-2025

16%

15% 18%

43%

2022 —2025 Epyllion’s State of Video Gaming in 2026

1%

4%

Remote Central, Latin, and South Americas, plus Caribbean MENA

15%

24%

North America (California )

10%

10%

Sources: Amir Satvat / Always Supporting the Gaming Community

Moreover, an increasing share of new content investment goes to external development partners that can offer lower talent costs, shorter commitments, and more flexible contracts Growth in Video Game Content Development Spend

Outsourced Share of Total YoY Increase

(Worldwide; PC + Console + Mobile + VR)

(Worldwide; PC + Console + Mobile + VR)

$5.5B

130% Outsourced Insourced

$5.0B

120% 110%

$4.5B

100%

$4.0B

90%

$3.5B

80% $3.0B 70% $2.5B 60% $2.0B 50% $1.5B

40%

$1.0B

30%

$0.5B

20%

$0.0B

10%

-$0.5B

2018

2019

Epyllion’s State of Video Gaming in 2026

2020

2021

2022

2023

2024

2025

0%

2018

2019

2020

2021

2022

2023

2024

2025

Sources: IDG Intelligence, Epyllion analysis

In sum, the video gaming industry (overall) continued its restructuring and retreat despite revenue growth

Private studio and publisher funding fell another 55%+ by dollars and deal counts

Even more games and studios were cut outright or had budgets trimmed

Another 9,000+ layoffs (following 35,000 from 2022 – 2024)

Hiring further concentrated in (lower cost) foreign markets

An even greater share of new content investment went to outsourcing

Which resulted in…

Epyllion’s State of Video Gaming in 2026

In 2025, content investment as a share of net revenues hit a (non -pandemic) 7 -year low. From 2019 – 2022, annual content spend grew $11B (+39%). 2022 – 2025 was only $2.3B (+6%) Total Video Game Content Development Spend

Content Dev Spend as a Share of Net Revenue

(Worldwide; PC + Console + Mobile)

(Worldwide; PC + Console + Mobile) $2.3B | +6%

$42.5B

26%

$10.9B | +39%

$40.0B

24%

Market growth resumes while pipelines and budgets are trimmed

Sudden drop due to unexpected surge in consumer spend in the pandemic

$37.5B 22%

$35.0B $32.5B

20%

$30.0B

18%

Record uptick caused by post -COVID drop in consumer spend, matched with post -COVID investment increases and cost growth

$27.5B 16%

$25.0B $22.5B

14%

$20.0B

12%

$17.5B

10%

$15.0B $12.5B

8%

$10.0B

6%

$7.5B

4%

$5.0B 2%

$2.5B $0.0B

2017

2018

Epyllion’s State of Video Gaming in 2026

2019

2020

2021

2022

2023

2024

2025

0%

2017

2018

2019

2020

2021

Sources: Ampere, CADPA, IDG Intelligence,

2022

2023

2024

2025

Newzoo , Niko Partners, Sensor Tower, Epyllion analysis

Even so, the operating margins of standalone platforms) outside China are far below pre Adj Operating Income as a Share of Net Revenue: 34 Non

gamemakers (i.e., those not owned by game -pandemic levels and struggling to grow -China, Non -Platform Video Game Publishers with Accessible P&Ls

(Worldwide; All Platforms; Sample set covers $59B in net revenue in 2025) 32.5% 30.0% 27.5%

25.0% 22.5%

Median 20.0%

Unweighted Avg.

17.5%

Weighted Avg.

15.0% 12.5% 10.0% 7.5%

5.0% 2.5% 0.0%

2019

2020

2021

2022

2023

2024

2025

Notes: 1Adjustments include converting gross revenues to net, adding back extraordinary goodwill impairments and write -offs, adding back amortization for acquisitions, and allocating unallocated corporate expenses to individual business units, as well as spot -base d assumptions/modeling, all where necessary. Publishers include Activision Blizzard, AppLovin (Apps Division), Aristocrat (Pixel United Division), Capcom (Digital Content Division), CD Projekt, Devolver, Dream Games, EA , Embracer, Epic Games (Content Division), Everplay , Garena, Gravity, Gungho , Huuuge , Konami, Krafton, Light & Wonder ( SciPlay Division), NCSoft , Netmarble , Nexon, Paradox, Pearl Abyss, Playtika , Pullup, Roblox, Sega (Entertainment Contents Division), Smilegate , Square Enix (Digital Entertainment Division), Stillfront , Take -Two, Ten Square Games, Ubisoft, Voodoo

Epyllion’s State of Video Gaming in 2026

Source: The companies, Epyllion analysis

In fact, the erosion in margins is so great that total operating profits have declined since 2019 despite consumer spending surging 40%+ (equivalent to $56 billion a year) Adjusted Operating Income: 33 Non

-China, Non -Platform Video Game Publishers with Accessible P&Ls

(Worldwide; All Platforms; Sample set covers $59B in net revenue in 2025) $15B $14B $13B

$12B $11B $10B $9B $8B $7B $6B $5B $4B $3B $2B $1B $0B

2019

2020

2021

2022

2023

2024

2025

Notes: 1Adjustments include converting gross revenues to net, adding back extraordinary goodwill impairments and write -offs, adding back amortization for acquisitions, and allocating unallocated corporate expenses to individual business units, as well as spot -base d assumptions/modeling, all where necessary. Publishers include Activision Blizzard, AppLovin (Apps Division), Aristocrat (Pixel United Division), Capcom (Digital Content Division), CD Projekt, Devolver, Dream Games, EA , Embracer, Epic Games (Content Division), Everplay , Garena, Gravity, Gungho , Huuuge , Konami, Krafton, Light & Wonder ( SciPlay Division), NCSoft , Netmarble , Nexon, Paradox, Pearl Abyss, Playtika , Pullup, Roblox, Sega (Entertainment Contents Division), Smilegate , Square Enix (Digital Entertainment Division), Stillfront , Take -Two, Ten Square Games, Ubisoft, Voodoo

Epyllion’s State of Video Gaming in 2026

Source: The companies, Epyllion analysis

Chapter I: Spending Growth but More Retrenchment and Margin Struggles in 2025 Chapter II: Why Growth is Scarcer Than Headlines Suggest

Chapter III: Video Games Are Losing the Attention War in the “Major Market 8” Chapter IV: The Novel Interactive Competitors Taking Attention, Time, and Spend from Video Games Chapter V: The Five Biggest Areas of Revenue Growth in the Video Game Industry in 2026 Chapter VI: Closing Thoughts on the “Industry” and Finding Growth in 2026

While global consumer spend is now at all -time highs, these topline headlines cover up what has really been a shrinking pool of revenue for most developers/publishers. Why?

China Is Eating the Video Gaming Industry

Net Growth in Console Is Growth in Platform Subscriptions

Decline in Home Markets

Epyllion’s State of Video Gaming in 2026

Brightness in PC Is Only Just Enough (& Might Dim?)

Industry Competition Is Growing but Appetites Remain Unchanged

Roblox Is Stealing Share and Growing Its Own Garden

Price Increases Are Helping Drive Growth, But Not All Titles Have Pricing Power

China : 20% of global player spend, but now 38% of growth (v. 15% in 2019). If a gamemaker wants to “match” global growth, they must win in China (or grow 1.6x the market elsewhere!)

Global Growth in Consumer Spend on Video Games

Chinese Market’s Share of Global Spending Change

(PC + Console + Mobile; Spend on Content + Services; Excludes VPN Buys)

(PC + Console + Mobile; Spend on Content + Services; Excludes VPN Buys)

$32B

50%

In China

$28B

Everywhere Else

7.3

45%

$24B 40%

$20B $16B

35% 24.4

$12B $8B

5.8

30%

1.5 2.5

3.7

3.4

$4B

8.3

8.1 3.9

25% 5.9

6.1

$0B

20% -6.3

-$4B

15%

-$8B

-$16B

10%

-9.1

-$12B

2019

2020

Epyllion’s State of Video Gaming in 2026

2021

2022

2023

2024

2025

5%

2019

2020

2021

2022

Sources: Ampere, CADPA, IDG Intelligence,

2023

2024

2025

Newzoo , Niko Partners, Sensor Tower, Epyllion analysis

China : 84% of its player spend goes to Chinese -made games. And foreign gamemakers net only a quarter of the remaining 16% spent on imports after local publishing and distribution China Spend on Video Games by Developer Origin

Chinese Gaming Companies’ Share of China Spend

(PC + Console + Mobile; Spend on Content + Services; Excludes VPN Buys)

(PC + Console + Mobile; Spend on Content + Services; Excludes VPN Buys)

$50B

100%

Chinese Publisher Total (Inc. Share of Imports)

Non -Chinese $45B

Chinese (Excl. foreign subsidiaries, e.g., Riot, Supercell)

90%

$40B

80%

$35B

70%

$30B

60%

$25B

50%

$20B

40%

$15B

30%

$10B

20%

$5B

10%

$0B

2019

2020

Epyllion’s State of Video Gaming in 2026

2021

2022

2023

2024

2025

0%

Chinese Publisher Share (Direct Game Sales)

2019

2020

2021

2022

Sources: Ampere, CADPA, IDG Intelligence,

2023

2024

2025

Newzoo , Niko Partners, Sensor Tower, Epyllion analysis

China : Chinese gamemakers have also grown their annual share of the non -China market from 10.7% to 14% in six years, thereby grabbing 24% of total non -China growth since 2019 Chinese Dev’s Share of Non

-China Game Spend

Non -China Spend on Video Games by Dev Origin

(PC + Console + Mobile; Spend on Content + Services; Excludes VPN Buys) 14%

(PC + Console + Mobile; Spend on Content + Services; Excludes VPN Buys) 147.1

$150B 141.0

140.3

13%

132.2

12%

$125B

18.0

15.5

131.1 17.3

11%

135.1

20.5

18.6 16.4

Chinese (Excl. foreign subsidiaries, e.g., Riot, Supercell)

107.8

10% $100B

9%

11.6

8% 7%

$75B

6%

116.8

5%

$50B

122.3

113.8

118.7

122.4

126.6

2023

2024

2025

Non -Chinese (Inc. foreign subsidiaries, e.g., Riot, Supercell)

96.2

4% 3% $25B

2% 1% 0%

2019

2020

Epyllion’s State of Video Gaming in 2026

2021

2022

2023

2024

2025

$0B

2019

2020

2021

2022

Sources: Ampere, CADPA, IDG Intelligence,

Newzoo , Niko Partners, Sensor Tower, Epyllion analysis

China : While the Chinese market is only 20% of global player spending and “only” 38% of growth, Chinese publishers have captured ~50% of global player spending growth since 2019 Worldwide Consumer Spending on Video Game Content (PC + Console + Mobile; Spend on Content + Services; Chinese Game Buys Using VPN are Tallied Outside China) 195.4

$200B 185.6

185.3 $180B

177.2

171.5

169.9

$160B $140B

139.8

$120B $100B

0.9

1.1 1.2

1.7

1.2

1.6

Publisher: Chinese* Gamer: Chinese Publisher: Chinese* Gamer: Non -Chinese Publisher: Non -Chinese Gamer: Chinese (Chinese Publisher Cut) Publisher: Non -Chinese Gamer: Chinese (Non -Chinese Publisher Cut)

0.9

$80B

$60B $40B

97.9 (70.1% )

119.0 (69.4% )

124.2 (67.0% )

115.5 (68.0% )

120.4 (67.9% )

124.7 (67.2% )

128.6 (65.8% )

2023

2024

2025

Publisher: Non -Chinese Gamer: Non -Chinese

$20B $0B

2019 *Chinese Publishers excludes

Epyllion’s State of Video Gaming in 2026

2020 2021 2022 non -Chinese subsidiaries, e.g. Riot Games, Supercell

Sources: Ampere, CADPA, IDG Intelligence,

Newzoo , Niko Partners, Sensor Tower, Epyllion analysis

Console : By 2025, the category had more than recovered from its post -pandemic sales pullback, hitting an all -time high of $41.6B (2.3% or $570MM above the 2020 high) Worldwide Consumer Spending on Console Video Game Content (Including Software and Subscriptions) 41.1

$42B

41.6

40.7

$39B

39.5

39.3

2023

2024

37.8

$36B $33B

32.7

$30B $27B $24B $21B $18B $15B $12B

$9B $6B $3B $0B

2019

Epyllion’s State of Video Gaming in 2026

2020

2021

2022

Sources: Ampere, CADPA, IDG Intelligence,

2025 Newzoo , Niko Partners, Sensor Tower, Epyllion analysis

Console : Yet 119% of net spending growth since 2020 has gone to platform services. Total spending on game sales and transactions is down nearly $3.7B per year (or 11%) Worldwide Consumer Spending on Console Video Game Content (Including Software and Subscriptions) 41.1

$42B

41.6

40.7

$39B

39.5

39.3

PlayStation Plus

37.8

$36B $33B

Xbox Live & Game Pass Nintendo Switch Online

32.7

$30B $27B $24B $21B $18B

34.2

$15B

32.5

27.3

29.5

30.7

29.6

30.5

2022

2023

2024

2025

$12B

Game Sales, DLC, & Micro transactions

$9B $6B $3B $0B

2019

Epyllion’s State of Video Gaming in 2026

2020

2021

Sources: Ampere, CADPA, IDG Intelligence,

Newzoo , Niko Partners, Sensor Tower, Epyllion analysis

Console : And as Chinese sales are >150% of total spending growth since 2020, the actual market for gamemakers has shrunk by ~$4.6B (and is up only 8% since 2019!)

Worldwide Consumer Spending on Console Video Game Content (Console; Including Software and Services; Chinese Game Buys Using VPN are Tallied Outside China) 41.1

$42B

41.6

40.7

$39B

39.5

39.3

PlayStation Plus

37.8

$36B $33B

32.7

0.3 0.4

$30B $27B

0.3

0.4

0.6

1.2

0.2

Xbox Live & Game Pass Nintendo Switch Online China Sales Share

$24B $21B $18B

33.9

$15B

32.1

27.1

29.1

30.3

2022

2023

28.9

29.4

2024

2025

$12B

Game Sales, DLC, & Micro transactions

$9B $6B $3B $0B

2019

Epyllion’s State of Video Gaming in 2026

2020

2021

Sources: Ampere, CADPA, IDG Intelligence,

Newzoo , Niko Partners, Sensor Tower, Epyllion analysis

PC : Not only did it skip a post -pandemic decline, but annual PC content sales have also grown by a remarkable 30% (or $9.4B) since 2020, roughly 16x as much dollar growth as console Worldwide Consumer Spending on PC Video Game Content (Including Software and Subscriptions) 40.7

$42B $39B

37.8

$36B $33B $30B

34.1

Console

34.8

35.1

2022

2023

31.4

29.2

$27B $24B $21B $18B $15B $12B

$9B $6B $3B $0B

2019

Epyllion’s State of Video Gaming in 2026

2020

2021

2024

Sources: Ampere, CADPA, IDG Intelligence,

2025 Newzoo , Niko Partners, Sensor Tower, Epyllion analysis

PC : Even after factoring out China -based sales, which constituted 29% of total growth since 2020, PC content sales are still up roughly +$6.7B Worldwide Consumer Spending on PC Video Game Content (PC + Console + Mobile; Spend on Content + Services; Chinese Game Buys Using VPN are Tallied Outside China) $42B

40.7

$39B

37.8

$36B

34.1

$33B $30B

34.8

35.1

In China

31.4

29.2

$27B $24B $21B $18B $15B $12B

$9B

20.3

22.8

24.4

25.1

25.4

2021

2022

2023

26.9

29.4

Outside China

$6B $3B $0B

2019

Epyllion’s State of Video Gaming in 2026

2020

2024

Sources: Ampere, CADPA, IDG Intelligence,

2025 Newzoo , Niko Partners, Sensor Tower, Epyllion analysis

PC/Console : But PC’s growth only just outstripped console’s decline. Together and excluding China, the category is +$2.1B (+3.7%) since 2020, well under the +$10B (+14%) headline Worldwide Consumer Spending on PC & Console Video Game Content (PC + Console + Mobile; Spend on Content + Services; Chinese Game Buys Using VPN are Tallied Outside China) $85B

82.4

$80B $75B

72.4

74.8

72.6

74.6

77.1

In China

$70B $65B

11.1 9.7

Console Platform Subscriptions

58.8

Game Sales, DLC, & Micro transactions

61.9

$60B

6.8

8.2

8.4

8.8

$55B $50B

5.4

$45B $40B $35B $30B $25B

56.7

56.5

54.2

55.7

55.9

2020

2021

2022

2023

2024

47.4

$20B $15B $10B $5B $0B

2019

Epyllion’s State of Video Gaming in 2026

Sources: Ampere, CADPA, IDG Intelligence,

2025 Newzoo , Niko Partners, Sensor Tower, Epyllion analysis

PC : Note, too, that much of the recent growth in non -Chinese spending was actually Chinese users who use VPNs to access (and pay for) Steam through foreign markets Top Two User Languages on Steam

1

(Worldwide; Trailing 90 Day Average; Based on Client Language Setting, Rather than First or Most Used Language) 45%

40% English

35%

English

30%

Chinese Languages Chinese Languages

25%

20%

15%

10%

5%

0% 2019 Epyllion’s State of Video Gaming in 2026

2020

2021

2022

2023

2024

2025

2026 Sources: Valve, Epyllion analysis

PC : And in 2025, Chinese -language PC users disengaged from Steam (to local alternatives, presumably), finishing the year with the lowest share of the total since May 2022 Top Two User Languages on Steam

1

(Worldwide; Trailing 90 Day Average; Based on Client Language Setting, Rather than First or Most Used Language) 45%

40% English

35%

30% Chinese Languages

25%

20%

15%

10%

5%

0% 2019 Epyllion’s State of Video Gaming in 2026

2020

2021

2022

2023

2024

2025

2026 Sources: Valve, Epyllion analysis

Roblox : This singular industry expander was over 4.5% of non captured (or created) 60% of net growth since 2021 Non -China Consumer Spend

Roblox Share of Non

(PC + Console + Mobile; Content + Services)

-China spend in 2025 and has

-China Spend

Roblox Share of Non

(PC + Console + Mobile; Content + Services)

$150B

-China Growth

(PC + Console + Mobile; Content + Services)

5.0%

40%

Roblox $140B 4.5%

35%

$130B $120B

4.0% 30%

$110B 3.5% $100B $90B

25%

3.0%

$80B 2.5%

20%

$70B $60B

2.0%

More Than 100% Net as Overall Market Shrank in 2022 but Roblox Grew

15%

$50B

1.5% $40B

10%

$30B

1.0%

$20B

5%

0.5% $10B $0B

2019

2020

2021

Epyllion’s State of Video Gaming in 2026

2022

2023

2024

2025

0.0%

2019

2020

2021

2022

2023

2024

2025

0%

2019

Sources: Ampere, CADPA, IDG Intelligence,

2020

2021

2022

2023

2024

2025

Newzoo , Niko Partners, Roblox, Sensor Tower, Epyllion analysis

The Realized Market for Non -Chinese Gamemakers : Up only $1B (or +0.9%) since 2020, even though the total market is up $24B (+14%). And since 2021, the realized market shrunk 1.8% Worldwide Consumer Spending on Video Game Content (PC + Console + Mobile; Spend on Content + Services; Chinese Game Buys Using VPN are Tallied Outside China) $200B $180B $160B $140B $120B 0.9

1.1

110.2 (64.3% )

113.1 (61.1% )

1.2

$100B

1.2

1.7

1.6

108.0 (61.0% )

110.4 (59.5% )

110.5 (56.6% )

2023

2024

2025

0.9

Publisher: Chinese* Gamer: Chinese Publisher: Chinese* Gamer: Non -Chinese Publisher: Non -Chinese Gamer: Chinese (Chinese Publisher Cut) Console Platform Subscriptions Roblox Publisher: Non -Chinese Gamer: Chinese (Non -Chinese Publisher Cut)

$80B $60B $40B

91.8 (65.7% )

104.2 (61.4% )

Rest of Market (I.e. Captured by Non -Chinese Publishers)

$20B $0B

2019 *Chinese Publishers excludes

Epyllion’s State of Video Gaming in 2026

2020 2021 2022 non -Chinese subsidiaries, e.g. Riot Games, Supercell

Sources: Ampere, CADPA, IDG Intelligence,

Newzoo , Niko Partners, Roblox, Sensor Tower, Epyllion analysis

The Realized Market for Non -Chinese Gamemakers : And so while global consumer spend grew $9.7B in 2025 (to a new all -time high), none of this trickled down to typical publishers Worldwide Consumer Spending on Video Game Content

– 2025 YoY Growth versus 2025

(Nominal Prices; Console + PC + Mobile; Excludes Hardware & Accessories; Includes Game Sales, DLC, Microtransactions, Subscri $10.0B

pti ons, and Services)

9.7

$9.0B $8.0B

3.8

$7.0B $6.0B $5.0B

2.1

$4.0B $3.0B

1.4

5.9

$2.0B

3.8 2.4

$1.0B $0.0B

Global Consumer Spend Growth

Epyllion’s State of Video Gaming in 2026

China Growth (Captured by Chinese Publishers)

Non -China Growth

Collected by Chinese Publishers

Non -China Growth Collected by Non Chinese Publishers

Console Platform Services

Sources: Ampere, CADPA, IDG Intelligence,

Roblox

Everyone and Everywhere Else

Newzoo , Niko Partners, Roblox, Sensor Tower, Epyllion analysis

Home Markets : Meanwhile, the countries that are typically prioritized by major gamemakers have declined outright; it’s smaller and less familiar markets that are growing global revenues Consumer Spending on Video Game Content in

U.S. + Japan + South Korea + Germany + U.K. + France + Canada + Italy (Including Software and Subscriptions)

$120B $110B

PC/Console Mobile

111.7 105.4

102.2

104.2

105.1

54.5

56.9

106.6

$100B $90B

85.3 59.2

$80B

54.5

53.6

$70B $60B

Category Breakdown Not Yet Reported

44.1

$50B $40B $30B $20B

50.9

52.4

2020

2021

48.6

49.7

48.2

2022

2023

2024

41.1

$10B $0B

2019

Epyllion’s State of Video Gaming in 2026

Sources: Ampere, CADPA, Circana, ESAC, Game Germany, IDG Intelligence, IIDEA, Kadokawa, KOCCA, Ministry of Science and ICT,

2025

Newzoo , Niko, SELL, Sensor Tower,

Ukie , Epyllion Analysis

Industry Competition : Despite revenue stagnations, annual releases have surged since 2019: PC is up 150% since 2019 and console 330%. And platform catalogues are +270% and +175% Steam Game Releases by Year

PlayStation Game Releases by Year

(Released in any Market)

(Released in any Market) 2,400

20,000

2,200

18,000

2,000 16,000 1,800 14,000

1,600

12,000

1,400

10,000

1,200 1,000

8,000

800 6,000 600 4,000 400 2,000 0

200

2019

2020

Epyllion’s State of Video Gaming in 2026

2021

2022

2023

2024

2025

0

2019

2020

2021

2022

2023

2024

2025 Sources: SteamDB , S&P Global

Industry Competition : The top PC/Console franchises (each 9 – 33 years old) hold a stable 45% of all player hours. And where share has been lost, it’s mostly to other 5 – 25-year-old hits Share of PS/Xbox Console Engagement Hours

Share of PC Engagement Hours

(Worldwide; Users 18+; 37 Markets excluding India and China)

(Worldwide; Users 18+; 37 Markets excluding India and China)

100%

100%

90%

90%

80%

80%

7,500 growing to 15,000 total games 70%

70%

60%

60%

50%

50%

Next Five

40%

40%

30%

30%

PlayStation/Xbox Big Five: 1 Call of Duty + FIFA/EA FC + Fortnite + Grand Theft Auto V + NBA 2K

20% 10% 0%

27,000 growing to 120,000+ total games

Next Five

20%

PC Big Five: 1 Counter -Strike + Fortnite + League of Legends + Minecraft + Roblox

10% Years Not Tracked

2019

2020

Epyllion’s State of Video Gaming in 2026

2021

2022

2023

2024

2025

0%

Years Not Tracked

2019

2020

2021

2022

2023

2024

2025 Source: Newzoo

Industry Competition : New PC/Console games get only 4 – 7% of total playtime (and half goes to just four titles). Steam reports higher, but “new” includes each year’s NBA 2K, FC, COD, etc.

Share of Time Spent: PC, PlayStation, & Xbox

Share of Time Spent: Steam

(Worldwide; 37 Markets excluding India and China) 100%

4% 8%

90%

5% 4%

80%

100% 7%

7%

3%

6%

19% 31%

70%

(Global; Includes Handhelds) New Release (Excl. Annuals) Prior Year Release (Excl. Annuals)

15%

33%

2– 5 Year Old Games (Excl. Annuals)

9% 17%

90%

15%

45%

1– 7 Years Old Games (Inc. Annuals)

41%

8+ Year Old Games (Inc. Annuals)

19% 70%

60%

60%

50%

50%

47%

40%

71% 30%

57%

72%

6+ Year Old Games (Inc. Annuals)

58%

20%

10%

10% Not Yet Reported

Years Not Tracked

2019

2020

Epyllion’s State of Video Gaming in 2026

2021

2022

2023

2024

2025

64%

30%

20%

0%

New Release (Inc. Annuals)

80%

53%

40%

14%

0%

38%

37%

2023

2024

Years Not Reported

2019

2020

2021

2022

2025

Sources: Newzoo , Valve, SteamDB , Epyllion analysis

Industry Competition : Mobile spend is five years flat and new releases are at a decade low share of spend and downloads as old giants strengthen and UA costs crowd out discovery Global Mobile Games Revenue by Game Age (Total Dollars; Excludes Android China and non $85B

$80B $75B

Global Mobile Game Installs by Game Age

-store IAP payment methods)

(Excludes Android China and non

-OS Platform Stores)

60B

11+ Years Old 6– 10 Years Old

11+ Years Old 55B

4– 5 Years Old

$70B

2– 3 Years Old

$65B

In -Year Release

6– 10 Years Old 4– 5 Years Old

50B 45B

2– 3 Years Old In -Year Release

$60B 40B

$55B $50B

35B

$45B 30B $40B 25B

$35B $30B

20B

$25B 15B

$20B $15B

10B

$10B 5B

$5B $0B

2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025

Epyllion’s State of Video Gaming in 2026

0B

2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025

Sources: Sensor Tower, Epyllion analysis

Pricing : Lastly, many of the leaders that have grown or sustained revenue have done so by successfully raising price, not from growing players, purchases, or play time Share of PlayStation Plus Subs

Top Selling Nintendo Platform Game

(Share by FY; U.S. prices; Annual plan listed)

(By Gen; U.S. Prices; Excludes Forced Bundles)

Virtual Currency: Top Titles (U.S. Prices)

100% $120 (New)

90% 80%

$100 (New)

70%

Candy Crush: Gold Bars Offer $160 (+$40)

$135 (+$35)

$160

Premium

$60 $135

Extra

Quantity

2023

2025

x 10

$2

$2

x 50

$5

$8

x 100

$10

$15

2023 $8 $20 $32 $80

2025 $9 $23 $37 $90

Mario Kart 8 (Wii U; 2014)

Fortnite: V -Bucks Price

60%

50%

$70

$60

Mario Kart 8 Deluxe (Switch; 2017)

40% $60 30%

$80 (+$20)

$80

Essential

$80 Mario Kart World

20%

(Switch 2; 2025) 10% 0% Annual Sales

NBA 2K: 85 Overall Rating Qualification Pathways

2023

2025

Games Played

~165

~240

or

Not Yet Reported

Virt. Curr.

~155K

~215K

USD Equiv.

~$32.5

~$47.5

2021

2022

2023

2024

2025

$3.6B

$3.4B

$3.8

$4.4B

$5.0

Epyllion’s State of Video Gaming in 2026

Quantity x 1,000 x 2,800 x 5,000 x 13,500

Sources: Sony, Nintendo, King, Epic Games, Apple, Epyllion analysis

And so while global player spend has firmly rebounded since 2022, where, when, and how this sum is spent has changed drastically… and thus so too have many developer’s prospects

Chinese Publishers Captured 50% of Global Spend Growth Since 2019

Net of Platform Subscription Services, Console Spend is Down 13% since 2020

In the “ Major Market 8 ,” Spend Is Still Down 4.5% Since 2021

Epyllion’s State of Video Gaming in 2026

The Net Decline in Console Since 2020 Offsets 68% of PC Growth

PC/Console Release are up 1.5– 3.3x Since 2019 but Share is Captive; New Mobile Releases Are At Record Low Shares

Roblox is 60% of Spend Growth Outside China Since 2021

Only the Top Franchises Tend to Have Pricing Power

With growth so elusive (despite record revenues) and margins falling (despite cost cuts), stock prices make more sense. A few names are up 4% or even 200% since the trough…

Indexed Share Prices of Major Non

-China Video Game Companies, 2023

– 2025

(Indexed to Closing Price of Last Trading Day of 2022 or IPO Closing Price; Based on USD Price) 550 525 500 475 450 425 400 375 350 325 Konami +202% Roblox +200%

300

275 Take -Two +153%

250 225 200

Nintendo +60% Unity +55% Capcom+45% Gravity +42% EA +38%* Krafton +32% CD Projekt +22% SQEX +18% Nexon +8% Sega +4%

175 150

125 100 75 50 25 0

2023 Epyllion’s State of Video Gaming in 2026

2024

2025

2026 Sources: Investing.com, NASDAQ

But only three companies managed to beat the S&P 500…

Indexed Share Prices of Major Non

-China Video Game Companies, 2023

– 2025

(Indexed to Closing Price of Last Trading Day of 2022 or IPO Closing Price; Based on USD Price) 550 525 500 475 450 425 400 375 350 325 Konami +202% Roblox +200%

300

275 Take -Two +153%

250 225 200

S&P 500 +78% Nintendo +60% Unity +55% Capcom+45% Gravity +42% EA +38%* Krafton +32% CD Projekt +22% SQEX +18% Nexon +8% Sega +4%

175 150

125 100 75 50 25 0

2023 Epyllion’s State of Video Gaming in 2026

2024

2025

2026 Sources: Investing.com, NASDAQ

… and many important video game industry leaders shed 10%, 20%, 50%, or even 80% of their value.

Indexed Share Prices of Major Non

-China Video Game Companies, 2023

– 2025

(Indexed to Closing Price of Last Trading Day of 2022 or IPO Closing Price; Based on USD Price) 550 525 500 475 450 425 400 375 350 325 Konami +202% Roblox +200%

300

275 Take -Two +153%

250 225 200

S&P 500 +78% Nintendo +60% Unity +55% Capcom+45% Gravity +42% EA +38%* Krafton +32% CD Projekt +22% SQEX +18% Nexon +8% Sega +4% Pearl Abyss -18% Remedy -22% NetMarble -24% Paradox -32% Playtika -53% Stillfront -68% Ubisoft -78% Embracer -82%

175 150

125 100 75 50 25 0

2023 Epyllion’s State of Video Gaming in 2026

2024

2025

2026 Sources: Investing.com, NASDAQ

Indexed to 2021, the picture is even more dire.

Only Konami beat the S&P, other “top” performers grew only 4 -24% in five years, most names fell, and many lost 50 -95% Indexed Share Prices of Major Non

-China Video Game Companies, 2021

– 2025

(Indexed to Closing Price of Last Trading Day of 2020 or IPO Closing Price; Based on USD Price) 320 300 280 260 Konami +151%

240

220 200 S&P 500 +84%

180 160 140

Take -Two +24% EA +18%* Roblox +10% Nintendo +4% CD Projekt +4% Sega -1% SQEX -10% Nexon -21% Capcom -28% Pearl Abyss -46% Krafton -52% Paradox -52% Remedy -63% Gravity -70% Unity -72% NetMarble -72% Playtika -88% Ubisoft -92% Embracer -92% Stillfront -95%

120 100 80 60 40 20 0

2021 Epyllion’s State of Video Gaming in 2026

2022

2023

2024

2025

2026 Sources: Investing.com, NASDAQ

Chapter I: Spending Growth but More Retrenchment and Margin Struggles in 2025 Chapter II: Why Growth is Scarcer Than Headlines Suggest

Chapter III: Video Games Are Losing the Attention War in the “Major Market 8” Chapter IV: The Novel Interactive Competitors Taking Attention, Time, and Spend from Video Games Chapter V: The Five Biggest Areas of Revenue Growth in the Video Game Industry in 2026 Chapter VI: Closing Thoughts on the “Industry” and Finding Growth in 2026

Over the last six years, video gaming has faced a surprising reality across eight “developed” countries representing ~60% of consumer spend: losing share in the Attention Wars Share of Global Consumer Spend on Video Game Content in 2019 (PC + Console + Mobile; Includes Packaged Games + Microtransactions/DLC + Services & Subscriptions)

U.S. 28% (#1 Globally)

Japan 11% (#3)

U.K. 3% (#5)

South Korea 8% (#4)

Germany 3% (#6)

France 3% (#7)

Can. 2% (#8)

Italy 1% (#11)

Epyllion’s State of Video Gaming in 2026

Rest of World 39% (China ranked #2, Russia #9, Mexico #10)

U.S. (#1 market by consumer spend globally) : Surveys consistently report that the share of the population that plays games has fallen by 2.5 – 4 points since before the pandemic Circana : U.S. Gamer Participation

ESA: U.S. Gamer Participation

(Population 5+)

Ampere: U.S. Gamer Participation (Population 5+)

(Population 5+)

82.5%

82.5%

82.5%

80.0%

80.0%

77.5%

77.5%

77.5%

75.0%

75.0%

75.0%

72.5%

72.5%

72.5%

70.0%

70.0%

70.0%

67.5%

67.5%

67.5%

65.0%

65.0%

65.0%

62.5%

62.5%

62.5%

60.0%

60.0%

60.0%

57.5%

57.5%

57.5%

55.0%

55.0%

55.0%

52.5%

52.5%

50.0%

50.0%

80.0%

COVID Peak

52.5% 50.0%

No Survey

No Survey

2018 2019 2020 2021 2022 2023 2024 2025

Epyllion’s State of Video Gaming in 2026

2018 2019 2020 2021 2022 2023 2024 2025

No Survey

No Survey

2018 2019 2020 2021 2022 2023 2024 2025

Sources: Circana , Entertainment Software Association (ESA), Ampere, Bureau of Labor Statistics, Epyllion analysis

Canada (#8) : Though irregularly polled, the Canadian trade association’s last report showed that roughly one in six adult players were lost from 2018 to 2022 despite the lockdowns Canada: Video Gaming Participation Rate

Canada: Video Gaming Participation by Platform

(Population 18+)

(Population 18+)

80%

80%

75%

75%

70%

70%

65%

65%

60%

60%

55%

55%

50%

50%

45%

45%

40%

40%

35%

35%

30%

30%

25%

25%

20%

20%

15%

15%

10%

10%

5% 0%

No Survey

2016

2017

No Survey

2018

Epyllion’s State of Video Gaming in 2026

2019

No Survey

2020

2021

2022

No Survey

No Survey

No Survey

2023

2024

2025

Mobile

Console

PC

5% 0%

2016

2017

2018

2019

2020

2021

2022

No Survey

No Survey

No Survey

2023

2024

2025

Source: Entertainment Software Association of Canada (ESAC)

South Korea (#4) : The share of the population that plays video games has fallen by 15 points compared to the 2017 – 2019 average (and down 22 points since the pandemic South Korea: Video Gaming Participation Rate

South Korea: Video Gaming Participation by Platform

(Population 10 – 64)

(Population 10 – 64)

80%

80%

75%

75%

70%

70%

65%

65%

60%

60%

55%

55%

50%

50%

45%

45%

40%

40%

35%

35%

30%

30%

25%

25%

20%

20%

15%

15%

10%

10%

5%

5%

0%

2016

2017

2018

Epyllion’s State of Video Gaming in 2026

2019

2020

2021

2022

high )

2023

2024

2025

0%

Mobile

PC

Console

2016

2017

2018

2019

2020

2021

2022

2023

2024

2025

Source: Korean Creative Content Agency (KOCCA)

Italy (#11) : The share of adults who regularly play video games has shrunk by over 5 points since 2019, with mobile up a point, console down a point, PC down 6.5 points Italy: Video Gaming Participation Rate

Italy: Video Gaming Participation by Platform

(Population 6 – 64)

(Population 6 – 64)

80%

80%

75%

75%

70%

70%

65%

65%

60%

60%

55%

55%

50%

50%

45%

45%

40%

40%

35%

35%

30%

30%

25%

25%

20%

20%

15%

15%

10%

10%

5% 0%

No Survey

No Survey

2016

2017

Reports in 2026

2018

Epyllion’s State of Video Gaming in 2026

2019

2020

2021

2022

2023

2024

2025

Mobile

Console PC

5% 0%

Reports in 2026

2016

2017

2018

2019

2020

2021

2022

2023

2024

2025

Source: Italian Interactive Digital Entertainment Association (IIDEA)

U.K. (#6) : The overall participation rate grew 21 percentage points in 2020, but a third of these gains has been lost over the four subsequent years, with each platform down U.K.: Video Gaming Participation Rate

U.K.: Video Gaming Participation by Platform

(Population 16+)

(Population 16+)

80%

80%

75%

75%

70%

70%

65%

65%

60%

60%

55%

55%

50%

50%

45%

45%

40%

40%

35%

35%

30%

30%

25%

25%

20%

20%

15%

15%

10%

10%

5% 0%

Reports in 2026

2016

2017

2018

Epyllion’s State of Video Gaming in 2026

2019

2020

2021

2022

2023

2024

2025

Mobile

Console PC

5% 0%

Reports in 2026

2016

2017

2018

2019

2020

2021

2022

2023

2024

2025 Source: Ofcom

France (#7) : Though participation rates are stable after COVID -19, they have flatlined overall since 2016 at ~52.5% (and individually, each platform has shrunk) France: Video Gaming Participation Rate

France: Video Gaming Participation by Platform

(Population 10 – 80)

(Population 10 – 80)

80%

80%

75%

75%

70%

70%

65%

65%

60%

60%

55%

55%

50%

50%

45%

45%

40%

40%

35%

35%

30%

30%

25%

25%

20%

20%

15%

15%

10%

10%

5%

5%

0%

2016

2017

2018

Epyllion’s State of Video Gaming in 2026

2019

2020

2021

2022

2023

2024

2025

0%

Mobile PC Console

2016

2017

2018

2019

2020

2021

2022

2023

2024

2025

Source: Syndicat des Editeurs de Logiciels de Loisirs (SELL)

Germany (#6) : A rare “up” market in terms of participation rates, Germany gained only four players per hundred in the eight years from 2016 to 2024 Germany: Video Gaming Participation Rate

Germany: Video Gaming Participation by Platform

(Population 6 – 69)

(Population 6 – 69)

80%

80%

75%

75%

70%

70%

65%

65%

60%

60%

55%

55%

50%

50%

45%

45%

40%

40%

35%

35%

30%

30%

25%

25%

20%

20%

15%

15%

10%

10%

5% 0%

Reports in 2026

2016

2017

2018

Epyllion’s State of Video Gaming in 2026

2019

2020

2021

2022

2023

2024

2025

Mobile Console

PC

5% 0%

Reports in 2026

2016

2017

2018

2019

2020

2021

2022

2023

2024

2025

Source: Game Germany (Game)

Japan (#3) : With participation rates up 11 points since 2019, Japan is an MM8 outlier.

Though its modest (and shrinking population) means only 6MM new players since 2019 Japan: Video Gaming Participation Rate

Japan: Video Gaming Participation by Platform

(Population 5 – 59)

(Population 5 – 59)

80%

80%

75%

75%

70%

70%

65%

65%

60%

60%

55%

55%

50%

50%

45%

45%

40%

40%

35%

35%

30%

30%

25%

25%

20%

20%

15%

15%

10%

10%

5% 0%

Reports in 2026

2016

2017

2018

Epyllion’s State of Video Gaming in 2026

2019

2020

2021

2022

2023

2024

2025

Mobile

Console

PC

5% 0%

Reports in 2026

2016

2017

2018

2019

2020

2021

2022

2023

2024

2025 Source: Kadokawa

One might argue that the loss of a percent of a problem for the video gaming industry

If… a player stopped playing altogether

Epyllion’s State of Video Gaming in 2026

— or two, or three — of players is not that big

Then… they probably weren’t big gamers

And so… how much revenue or “value” is really lost?

But in practice, all player loss is a

compounding problem.

6 5 4

3 2 1 Epyllion’s State of Video Gaming in 2026

Growth can only come from greater monetization of (ever fewer) remaining players This can come from prices being forced up, players buying more, ads, or serving other business models (e.g., Amazon Prime, Google Cloud, etc.)

If players don’t spend more, all new investments (e.g., hiring, raises, new games, etc.) must be borne by existing players, or otherwise reduce publisher profits (Of course, the more likely the latter outcome, the less likely publishers are to do the former)

Individual games can only grow by stealing other games’ players, playtime, or spend An eat -or-be-eaten market means growing one title involves shrinking one or more others

It’s even harder for new games to break through New players and markets are always the greatest opportunity for new studios and games

The network effects of all games and gaming platforms are impaired, which in turn impairs the satisfaction and spending rates of all remaining players If some players have stopped playing altogether, many are likely playing less, too Player loss is the clearest signal, but it’s just the “smoke” behind a bigger fire

Source: Epyllion analysis

U.S. (#1) : PC/Console content spend is down 8% since 2020/2021 (or -$2.3B); Mobile’s annual growth flattened out in 2025, but is +12% since 2020 and now outstrips PC/Console

$30.0B

U.S.: PC/Console Video Game Content Spend

U.S.: Mobile Video Game Content Spend

(Packaged Sales + Microtransactions + Subscriptions/Services)

(Packaged Sales + Microtransactions + Subscriptions/Services)

Combined PC/Console

$30.0B 28.0

28.2

$27.5B 25.7

26.3

$27.5B 25.7

26.0

25.7

$25.0B

24.3

$25.0B 22.9

22.7

$22.5B $20.0B

23.8 22.5

21.9

$22.5B

26.6

$20.0B 18.2

$17.5B

$17.5B

16.1

15.6 $15.0B

$15.0B

$12.5B

$12.5B

$10.0B

$10.0B

$7.5B

$7.5B

$5.0B

$5.0B

$2.5B

$2.5B

12.9

$0.0B

2016

2017

2018

Epyllion’s State of Video Gaming in 2026

2019

2020

2021

2022

2023

2024

2025

$0.0B

10.9 8.9

2016

2017

2018

2019

2020

2021

2022

2023

2024

2025

Sources: Circana , Sensor Tower

U.S. (#1) : Not just down on spend, either. Mobile game installs are at a 12 -year low, hours played have tumbled, and even time spent watching video game streaming is flatlined.

U.S. Mobile Game Installs

U.S. Mobile Gaming Hours Played

Hours Watched of Game Streams

(iOS and Android)

(iOS and Android)

(Mostly Twitch, YouTube Gaming, Kick)

5.5B

7.0B

45B

6.5B

5.0B

40B

6.0B

15.5

4.5B

13.7

35B

5.5B 13.8

4.0B

13.5

13.8

30B

3.5B

4.2

4.5B 4.5

25B

3.0B

4.0B 5.4 6.4

2.5B

5.0B

8.2

20B

3.5B 3.0B

2.0B

2.5B

15B 25.9

1.5B

2.0B

24.8 21.5

10B 1.0B

18.9

17.8

1.5B 1.0B

5B

0.5B 0.0B

0.5B

Years Not Tracked

2014

2016

2018

2020

2022

2024

0B

2019

2020

Mid-Core Epyllion’s State of Video Gaming in 2026

2021

2022

2023

Hyper/Hybridcasual

2024

2025

0.0B

2019

2020

2021

2022

2023

2024

2025

Casual Source: Sensor Tower, Stream Hatchet

Canada (#8) : After five years, Canadian PC/Console sales are still 1.5% below 2020’s levels, while mobile is up only 0.7%. Growth is tough when customers are diminishing.

Canada: PC/Console Video Game Content Spend

Canada: Mobile Video Game Content Spend

(Packaged Sales + Microtransactions + Subscriptions/Services) $2.00B

Combined PC/Console

(Packaged Sales + Microtransactions + Subscriptions/Services) $2.00B

1.85

1.84 1.75

$1.75B

1.79

1.83 1.75

$1.75B

1.69

1.59 $1.50B

1.64

1.67

1.57 $1.50B

1.44

1.50

1.51

2022

2023

1.31 $1.25B

1.23

$1.25B 1.09

$1.00B

$1.00B 0.88 0.79

$0.75B

$0.75B

$0.50B

$0.50B

$0.25B

$0.25B

$0.00B

2016

2017

2018

Epyllion’s State of Video Gaming in 2026

2019

2020

2021

2022

2023

2024

2025

$0.00B

0.66

2016

2017

2018

2019

2020

2021

2024

2025

Source: Newzoo , Sensor Tower

U.K. (#5) : PC/Console has flatlined from 2021 – 2024 ; Mobile, which has held most of its post -pandemic playerbase , is still growing at a 4.2% CAGR since 2020

$5.0B $4.5B

U.K.: PC/Console Video Game Content Spend

U.K.: Mobile Video Game Content Spend

(Packaged Sales + Microtransactions + Subscriptions/Services)

(Packaged Sales + Microtransactions + Subscriptions/Services) $5.0B

PC Console

4.44 3.93

$4.0B

0.89

4.36

4.37

4.37

$4.5B

0.81

0.82

0.83

$4.0B

3.65 $3.5B 3.17 $3.0B

2.95

3.30

0.86

$3.5B

1.03

$3.0B

0.74 1.02

$2.5B

$2.5B

1.04

2.21

$2.0B

$2.0B 3.55

3.55

3.54

3.07

$1.5B 2.63 $1.0B

3.55

1.91

$1.5B

1.35

1.39

1.51

1.78

1.79

1.53

2.56

2.15

$1.0B

$0.5B $0.0B

1.87

1.99

$0.5B Not Yet Reported

2016

2017

2018

Epyllion’s State of Video Gaming in 2026

2019

2020

2021

2022

2023

2024

2025

$0.0B

Not Yet Reported

2016

2017

2018

2019

2020

2021

2022

2023

2024

2025

Sources: UK Interactive Entertainment (UKIE) Federal Reserve Bank

Korea (#4) : PC/Console shrank 10% from 2021 – 2024 and mobile dropped 4%; USD/KRW ForEx has been a big headwind, but Q1 – Q3 2025 KRW preliminaries are down 5%+ in Won S. Korea: PC/Console Video Game Content Spend

S. Korea: Mobile Video Game Content Spend

(Packaged Sales + Microtransactions + Subscriptions/Services) $10B $9B

(Packaged Sales + Microtransactions + Subscriptions/Services) $10B

PC

9.39

Console

8.92

$9B

9.15

9.03

8.20 $8B

$8B

$7B

$7B 5.84

$6B 5.05

$5B 4.26

5.36

5.08

5.37

5.20 $5B

4.72

4.35 $4B 4.92

$3B

4.57 4.04

4.15

4.49

4.51

4.41

3.54

$3B

4.12

4.02 $2B

$1B $0B

5.67

5.28

$4B

$2B

6.64

$6B

$1B

2016

0.33 2017

0.48

0.60

2018

2019

Epyllion’s State of Video Gaming in 2026

0.93 2020

0.92 2021

0.87 2022

0.86 2023

0.87 2024

Not Yet Reported

2025

$0B

Not Yet Reported

2016

2017

2018

2019

2020

2021

2022

2023

2024

2025

Sources: KOCCA, South Korea Ministry of Science and ICT, Federal Reserve Bank

France (#7) : 2024 saw a 7 -year low in PC/Console; mobile has been mostly sideways since 2020 but is finally starting to edge up, growing 13% from 2020 to 2024

$3.00B $2.75B

France: PC/Console Video Game Content Spend

France: Mobile Video Game Content Spend

(Packaged Sales + Microtransactions + Subscriptions/Services)

(Packaged Sales + Microtransactions + Subscriptions/Services) $3.00B

PC Console

2.76

$2.75B 2.57

$2.50B 0.75

2.36

2.07 $2.00B

2.22

0.56

$2.25B

2.43

2.35

2.19

0.50

1.87

$2.25B

0.54

0.40

0.56

$2.50B

$2.00B

0.53

0.55

$1.75B

2.14 1.91

$1.75B $1.50B

$1.25B

$1.25B

1.89

1.98

1.64

0.49 $1.50B

1.89

1.26 1.04

2.01

2.01

$1.00B

1.80 $0.75B

1.39

1.95 1.72

$1.00B

1.89 1.66

1.52

$0.75B

$0.50B

$0.50B

$0.25B $0.00B

0.85

$0.25B Not Yet Reported

2016

2017

2018

Epyllion’s State of Video Gaming in 2026

2019

2020

2021

2022

2023

2024

2025

$0.00B

Not Yet Reported

2016

2017

2018

2019

2020

2021

2022

2023

2024

2025

Sources: SELL, Federal Reserve Bank

Germany (#5) : Despite minor participation rate 2021 and mobile is up only 0.9%

$4.5B

growth , PC/Console has declined 8.2% since

Germany: PC/Console Video Game Content Spend

Germany: Mobile Video Game Content Spend

(Packaged Sales + Microtransactions + Subscriptions/Services)

(Packaged Sales + Microtransactions + Subscriptions/Services) $4.5B

PC Console

4.08

4.01

$4.0B

$4.0B

3.76

3.68

3.42

$3.5B

$3.5B 1.82

1.78

$3.0B

1.66 2.60

1.45 $2.5B

2.25

2.28

3.17

2.96

$3.0B

1.64

3.32

3.29

$2.5B

2.29

2.06

2.03 $2.0B 0.79

0.78

$2.0B

0.83

1.78

0.72 $1.5B

$1.5B

$1.0B

1.97 1.32

1.46

1.50

2.23

2.12

2.26

2.02

$1.0B

1.45

$0.5B

$0.0B

$0.5B Not Yet Reported

2016

2017

2018

Epyllion’s State of Video Gaming in 2026

1.30

2019

2020

2021

2022

2023

2024

2025

$0.0B

0.44 Not Yet Reported

2016

2017

2018

2019

2020

2021

2022

2023

2024

2025

Sources: Game Germany, Federal Reserve Bank

Italy (#11) : PC/Console software surged 22% during the pandemic, but four years later, sales were down 20% and 2% under 2019. Mobile is up 9% from 2021 to 2024

$1.25B

Italy: PC/Console Video Game Content Spend

Italy: Mobile Video Game Content Spend

(Packaged Sales + Microtransactions + Subscriptions/Services)

(Packaged Sales + Microtransactions + Subscriptions/Services)

1.24

1.23

$1.25B

Combined PC/Console 1.09 1.05

1.01

0.99

$1.00B

0.98

$1.00B

0.93

0.90 0.84 0.80

$0.75B

0.75

0.79

$0.75B

0.71

0.59

0.53 $0.50B

$0.50B

$0.25B

$0.25B

$0.00B

Not Yet Reported

2016

2017

2018

Epyllion’s State of Video Gaming in 2026

2019

2020

2021

2022

2023

2024

2025

$0.00B

0.44

0.44

Not Yet Reported

2016

2017

2018

2019

2020

2021

2022

2023

2024

2025

Sources: IIDEA, Federal Reserve Bank

Japan (#3) : PC/Console is 42% in JPY since 2021, but publishers have been unable to raise prices to net JPY/USD decline, resulting in a 6% fall. Mobile is flat since 2021, thus -27% Japan: PC/Console Video Game Content Spend

Japan: Mobile Video Game Content Spend

(Packaged Sales + Microtransactions + Subscriptions/Services) $16B

(Packaged Sales + Microtransactions + Subscriptions/Services) 15.67

$16B

PC

16.01

15.00

14.43

Console $14B

$14B

13.21 12.25

$12B

12.06

$12B

11.54

11.08 $10B

$10B

$8B

$8B

$6B

$6B

4.84 1.14

$4B

$2B

2.73 0.64

3.30

2016

2.18 2017

2.39

1.20

4.40

4.43

4.28

1.44

1.68

1.75

2.96

2.75

2.53

0.75 3.70

2.09 $0B

2.80 0.62

3.03 0.64

4.55

2.54

3.35

$4B

$2B Not Yet Reported

2018

Epyllion’s State of Video Gaming in 2026

2019

2020

2021

2022

2023

2024

2025

$0B

Not Yet Reported

2016

2017

2018

2019

2020

2021

2022

2023

2024

2025

Sources: Kadokawa, Federal Reserve Bank

“Mature Market 8 :” Total PC/Console software sales shrank by 8% from 2021 – 2024 ( -$4.2B).

Mobile is down 3.8% ( -$2.3B), though five of eight markets are at all -time highs

$55B

MM8: Mobile Video Game Content Spend

(Packaged Sales + Microtransactions + Subscriptions/Services)

(Packaged Sales + Microtransactions + Subscriptions/Services) $60B

Unassigned PC Console

50.9

$55B

52.4 48.6

$50B $45B

41.1

34.9

$30B $25B $20B $15B $10B $5B

2016

2017

2018

Epyllion’s State of Video Gaming in 2026

2019

2020

2021

2022

2023

53.6

2022

2023

44.1

$45B

31.4

$0B

Casual

54.5

$50B

48.2

$40B $35B

56.9 54.5

Mid-Core

Data Outstanding but Very Similar Figure

42.3

49.7

59.2 Hybrid/Hypercasual

2024

2025

39.3

$40B 33.6

$35B $30B

Data Outstanding but Very Similar Figure

$60B

MM8: PC/Console Video Game Content Spend

27.3

$25B $20B $15B $10B $5B $0B

2016

2017

2018

2019

Sources: Circana, Game Germany, IIEDA, Kadokawa, KOCCA, South Korea Ministry of Science and ICT,

2020

2021

2024

2025

Newzoo , SELL, UKIE, Federal Reserve Bank, Epyllion analysis

Chapter I: Spending Growth but More Retrenchment and Margin Struggles in 2025 Chapter II: Why Growth is Scarcer Than Headlines Suggest

Chapter III: Video Games Are Losing the Attention War in the “Major Market 8” Chapter IV: The Novel Interactive Competitors Taking Attention, Time, and Spend from Video Games Chapter V: The Five Biggest Areas of Revenue Growth in the Video Game Industry in 2026 Chapter VI: Closing Thoughts on the “Industry” and Finding Growth in 2026

Interactivity is still ascendant… but that’s video gaming’s challenge. Interactive experiences continue to emerge and offer novel forms of skill mastery, progression loops, and social play

Soc ial Vid eo

Video Games

AI ist an

ts

i ct s di t Pre rke

ss

Ma

on

Crypto & Memecoins

Epyllion’s State of Video Gaming in 2026

tor Crea graphy rno Po

Online Sp ort Bettin s g

ing m a iG

A

Source: Epyllion analysis

Social Video : In just the U.S., consumption of TikTok is up 39 million hours to the second half of 2020 and first half of 2021 (i.e., after COVID normalization)

a day compared

Average Daily Hours of TikTok Watched in the U.S. (Total population) 110MM

107

108 102

100

100MM 90MM 77

80MM 70MM 60MM

50

50MM 40MM

30MM 20MM

16

10MM 0MM

2019

Epyllion’s State of Video Gaming in 2026

2020

2021

2022

2023

2024

2025 Sources: Emarketer , Epyllion analysis

Social Media : TikTok’s growth hasn’t come from direct competitors. Americans now use 122 million more hours social media per day than in 2020/21 (~21 mins for each of 341MM people) Average Daily Hours of Use in the U.S. (Total population)

499

500MM

500

472 440

450MM

TikTok

398

400MM 359 350MM 300MM

295 YouTube

250MM 200MM 150MM Instagram 100MM 50MM 0MM

Facebook

2019

Epyllion’s State of Video Gaming in 2026

2020

2021

2022

2023

2024

2025 Sources: Emarketer , Epyllion analysis

Creator Porn : In 2025, Americans spent ~$5B on OnlyFans (up from $215MM in 2019) to access exclusive images and video, and engage in intimate/parasocial direct messaging Annual OnlyFans User Spending by Reported Region (USD; Year -End November 30) $8.0B $7.5B

Rest of World

$7.0B $6.5B $6.0B

UK & Europe

$5.5B $5.0B $4.5B $4.0B $3.5B

$3.0B $2.5B

U.S.

$2.0B $1.5B $1.0B $0.5B $0.0B

2019

Epyllion’s State of Video Gaming in 2026

2020

2021

2022

2023

2024

2025 E

Sources: Fenix International (“OnlyFans”),

Similarweb , Epyllion analysis

Creator Porn : At least two thirds of OnlyFans spending is now transactional/PPV, rather than from subscription payments. As in video gaming, microtransactions are beating gate fees Annual OnlyFans User Spending by Reported Region (USD; Year -End November 30) $8.0B

One -Off/Transaction

$7.5B

Subscription/Recurring

$7.0B

Unstated

$6.5B $6.0B $5.5B $5.0B $4.5B $4.0B $3.5B

$3.0B $2.5B $2.0B $1.5B $1.0B $0.5B $0.0B

2019

Epyllion’s State of Video Gaming in 2026

2020

2021

2022

2023

2024

2025E

Sources: Fenix International (“OnlyFans”),

Similarweb , Epyllion analysis

Crypto : Crypto always siphoned hours and spend from video gaming, but crypto’s first boom coincided with video gaming’s COVID surge; the second hit during video gaming’s stagnation Installs of Dedicated Cryptocurrency Trading Apps (Excludes finance apps with crypto trading, but which are not crypto

150MM 135MM

Memecoin Transaction Value: -focused)

$50B

International U.S.

Global

$45B

120MM

$40B

105MM

$35B

90MM

$30B

75MM

$25B

60MM

$20B

45MM

$15B

30MM

$10B

15MM

$5B

0MM Q1’2019

pump.fun + PumpSwap

(These platforms are an inexhaustive but indicative measure of total volumes)

2020

Epyllion’s State of Video Gaming in 2026

2021

2022

2023

2024

2025

$0B Q1’2019

2020

2021

2022

2023

2024

2025

Sources: SensorTower , @datadashboards

AI Apps : Consumer -centric apps, including those for role play, erotica, and art, have also soared in the years since video gaming stalled (and didn’t exist during gaming’s highs) Quarterly Installs of Consumer AI/Assistant Apps (Excludes applications which feature AI/assistants, but are not primarily classified as such) 1.0B 0.9B

International U.S. The second -largest increase in weekly ChatGPT downloads occurred in the two weeks after its viral “Ghibli” art trend in late March 2025

0.8B 0.7B 0.6B 0.5B 0.4B 0.3B 0.2B 0.1B 0.0B

Q1’2019

Epyllion’s State of Video Gaming in 2026

Q1’2020

Q1’2021

Q1’2022

Q1’2023

Q1’2024

Q1’2025 Source: Sensor Tower

Prediction Markets : In Q4, users placed 1.5MM bets a day, averaging $300 in notional value, with untold hours of research, tracking, and social engagement around these bets Quarterly Bets on Top Prediction Markets

Quarterly Notional Value Bet on Prediction Markets

(Global; Where Legal) 140M 130M 120M 110M 100M

(Global; Where Legal) $42B

Kalshi

$39B

Polymarket Limitless

$36B

Myriad

$33B

Opinion Predict

$30B

90M

$27B

80M

$24B

70M

$21B

60M

$18B

50M

$15B

40M

$12B

30M

$9B

20M

$6B

10M

$3B

0M Q1’2019

2020

Epyllion’s State of Video Gaming in 2026

2021

2022

2023

2024

2025

$0B Q1’2019

2020

2021

2022

2023

2024

2025 Source: @datadashboards

Online Sports Betting : U.S. net betting losses crossed $17B in 2025, up 35x from 2019 and growing 35% a year as legalization expands and betting further integrates into live sports Annual U.S. Online Sports Betting Lawful GGR by Years Since Launched (Gross Gaming Revenue, equal to total wagers less the sum paid out as winnings; Excludes black market/unlicensed betting) $20B

50 # of Legal States

$16B

2025 (1 States Launched)

$17.0 2025 (1 State) 2024 (3 States)

2024 (3 States Launched) 2023 (5 States Launched) 2022 (5 States Launched) 2021 (5 States Launched)

$14B

$14.0

2023 (5 States)

2020 (4 States Launched)

45 40 35

2019 (7 States Launched) $12B

30

2018 (2 States Launched) $10.5

2022 (5 States)

$10B

25

$8B

2021 (5 States)

$6.9

$6B

20

Total States Legalized

$18B

15 2020 (4 States) $3.6

$4B

10 2019 (7 States)

$2B

$1.1 $0.5

$0B

2019

Epyllion’s State of Video Gaming in 2026

5

2018 (2 States)

2020

2021

2022

2023

2024

2025

0

Source: Eilers & Krejcik Gaming

Online Sports Betting : Despite bans in many top markets (e.g., Korea, Australia, Japan, China), international net losses are now $53B a year (+210% or +$36B since 2019) Global Online Sports Betting GGR (Gross Gaming Revenue, equal to total wagers less the sum paid out as winnings; Excludes black market/unlicensed betting) $70B

$69.7

3YR -CAGR

$17.0

U.S. +35%

$52.7

Rest of World (As Legal) +20%

$65B $60B

$57.2

$55B $14.0

$50B $45.8 $45B $40B

$37.4

$35B $31.1 $30B

$17.6B $0.5

$21.3 $1.1

$43.2 $35.4

$15B $10B

$6.9

$3.6

$25B $20B

$10.5

$27.4 $17.1

$30.5

$20.1

$5B $0B

2019

Epyllion’s State of Video Gaming in 2026

2020

2021

2022

2023

2024

2025

Sources: American Gambling Association, Eilers & Krejcik Gaming, H2 Gambling Capital

iGaming : Only recently legal in parts of the U.S., and sometimes called “ Money Gaming,” refers to digital games in which players bet and can

iCasinos ” or “Real cash out money

U.S. iGaming Categories buy Net Player Outlays

Operating Requirements

(By GGR; Excludes black market/unlicensed betting)

(U.S. Example; Non -Exhaustive)

2% Multiplayer Poker 19%

Singleplayer Table Games (Rendered or Live Camera to a Set)

• Secure state license • Limit operations and advertising to licensed states • Use client -side geolocation software (PC) and device -side GPS (mobile) software (PC) to ensure customer playing in licensed location • Deploy Know -Your-Customer (KYC) protocols to ensure user has right to play

Singleplayer Slots

79%

• Manage robust anti -money laundering protocols • Submit to recurring audits of platform operations, security, liquidity, KYC, and luck/odds systems by regulatory authorities • Deploy “responsible gaming” systems (e.g., deposit limits, self exclusion capability, long session or large loss reminders)

2025 Epyllion’s State of Video Gaming in 2026

Sources: Eilers & Krejcik Gaming,

BetMGM , Epyllion analysis

iGaming : Though legal in only 7 states (each growing 22 the size of the mobile casino game category, and 21% of U.S. iGaming GGR by State (GGR) $11B $10B $9B

3YR CAGR RI CT +39%

MI +25%

$8B

– 117% a year), iGaming is already 2x all U.S. video game spend

U.S. iGaming v Mobile Casino Spend

iGaming as Share of U.S. Gaming

(GGR as a Share of Consumer Spend)

(GGR as a Share of Consumer Spend)

200%

22%

180%

20% 18%

160%

16%

140% WV +44%

$7B

14% 120% 12%

$6B 100% PA +27%

$5B

10% 80% 8%

$4B DE +117%

$3B

6%

40%

$2B

NJ +22%

$1B $0B

60%

2019 2020 2021 2022 2023 2024 2025

Epyllion’s State of Video Gaming in 2026

4%

20% 0%

2%

2019

2020

2021

2022

2023

2024

2025

0%

2019

2020

2021

2022

2023

Sources: Eilers & Krejcik Gaming,

2024

2025

Circana , Sensor Tower Epyllion analysis

iGaming : Despite (ever fewer) bans in top markets (China, Korea, Japan), players now lose $54B a year in legal markets (up from $11B in 2019), roughly 45% of video game spend Global iGaming GGR (GGR is Gross Gaming Revenue, equal to total wagers less the sum paid out as winnings; Excludes black market/unlicensed betti $55B $50B

ng) $54.0

3YR -CAGR

$10.9

U.S. +26%

$43.1

Rest of World (As Legal) +25%

$45B $41.8 $40B $8.5 $35B

$33.1

$30B

$27.5

$25B

$22.3

$15.8 $1.7

$15B

$5B $0B

$5.4

$3.9

$20B

$10B

$6.6

$33.3 $26.5

$11.3 $0.5

$22.1 $18.3

$10.8

2019

Epyllion’s State of Video Gaming in 2026

$14.1

2020

2021

2022

2023

2024

2025

Sources: Eilers & Krejcik Gaming, H2 Gambling Capital, Epyllion analysis

iGaming : Though the category might seem too distinct to compare to traditional video games, India is a clear case study on how it can squeeze the growth of the latter Consumer Spending on Video Games in India, Including iGaming (Excluding VAT; Excludes black market/unlicensed betting) $3.0B

Real -Money Gaming Traditional Video Games RMG Banned in August

$2.5B

$2.0B 2.3 $1.5B

2.0 1.3

1.5 0.9

$1.0B

1.1

$0.5B 0.3

0.6

0.5

0.6

0.5

0.6

0.8

0.2 $0.0B

2019

Epyllion’s State of Video Gaming in 2026

2020

2021

2022

2023

2024

2025 Source: Lumikai

iGaming : In mechanics, design, and IP, there’s little difference between “mobile gaming” slots and ‘ iCasino ” slots. And if a player’s $20 goes in and never returns, how different is it?

Traditionally Defined Video Games (i.e., “No Money Out” Casino Slots) Pictured: Take -Two / Zynga’s Game of Thrones Slots Casino and Wizard of Oz Slots

iGaming (i.e., “Real Money Gaming Casino Slots”) Pictured: Microgaming’s Game of Thrones: Power Stacks and Light & Wonder’s Wizard of Oz Slots

Epyllion’s State of Video Gaming in 2026

iGaming : And while the “traditional” (i.e. no cashout) mobile casino genre long outpaced total mobile gaming growth, the genre is now shrinking as whale players depart for iCasinos Casino Genre Share of Mobile Gaming Revenues

Casino Genre Share of Mobile Gaming Growth

(International excludes China; Alt Payments Revenue is Estimated)

(International excludes China; Alt Payments Revenue is Estimated)

26%

$15.0B

Casino

$2.5

24%

Non -Casino

$12.5B 22%

USA $10.0B

20%

$0.9

18%

$7.5B

16%

$0.7

$1.1

$12.5

$5.0B

14% International (Exc. USA & China)

12%

$1.4

$7.8 $6.0

$2.5B

$1.0

$6.4

$5.2 $3.5

10% $0.0B

8% 6%

$2.0

$1.9

-$1.0

-$0.3

-$2.5B -$7.0

4% -$5.0B 2% 0%

2016

2017

2018

Epyllion’s State of Video Gaming in 2026

2019

2020

2021

2022

2023

2024

2025

-$7.5B

2017

2018

2019

2020

2021

2022

2023

2024

2025

Sources: Sensor Tower, Epyllion analysis

iGaming : With iGaming, U.S. growth from 2021 to 2025 increases from Non -China international goes from +10% to +30%. And this is all despite U.S. Consumer Spending on Video Games

Non -U.S./China Consumer Spending on Video Games

(Console + PC + Mobile + iGaming; Excludes Hardware & Accessories)

(Console + PC + Mobile + iGaming; Excludes Hardware & Accessories)

63.2

$65B

60.2

$60B

iGaming (GGR)

56.7

56.4 53.6

$55B

51.6 Mobile (Casino)

$50B $45B $40B

-0.4% to +12.0%. widespread bans

149.9

$150B $140B

135.2

$130B

iGaming (GGR)

122.8

$120B

115.8

$110B

114.4

105.2

Mobile (Casino)

$100B 39.3 Mobile (Excl. Casino)

$35B

$90B

85.8

$80B

Mobile (Excl. Casino)

$70B

$30B

$60B

$25B

$50B

$20B

$40B $15B

PC & Console

$10B

PC & Console

$20B

$5B $0B

$30B

$10B

2019

2020

Epyllion’s State of Video Gaming in 2026

2021

2022

2023

2024

2025

$0B

2019

2020

2021

2022

2023

Sources: Circana , Sensor Tower, Eilers & Krejcik Gaming, H2 Gambling Capital, Ampere, CADPA, IDG Intelligence,

2024

2025

Newzoo , Niko Partners, Epyllion analysis

The last six years saw massive improvements in the appeal, functionality, and cultural role of various novel apps/services. Video gaming has not matched this experiential growth.

Creator Pornography

Prediction Markets

AI Assistants

Significant Productization

Integration into Mass Media

Online porn isn’t new, nor newly popular ; but it is new that viewers can easily, safely, and constantly chat with performers, while also commissioning private photos/videos. It’s also new that so much porn monetizes (and primary through microtransactions)

Sports betting is now integrated into sports broadcasts, with sports broadcasters (e.g. ESPN) licensing their brands to sports books

As many previously fringe pastimes shifted to the mainstream, they became fundamentally more compelling because they are more popular

Since 2019, iGaming has been legalized in seven U.S. states, as well as Germany, Brazil, Ontario (Canada), and many other countries

Prediction markets are natively integrated into popular web platforms (e.g. Substack), baked into other financial applications (Robinhood), and widely covered in mainstream news

Many previously private pastimes (e.g. online porn, gambling) have become also become inherently more social – both in private friend groups, as well as across the social internet, too

Online sports betting has expanded from two U.S. states to 32, while Canada, Brazil, Argentina, Sweden, New Zealand and others approved it on a de facto nationwide basis

Short -form video, iGaming, sports betting, crypto, et al, have never been so easy to consume, so personalized, so social, or so optimized for engagement

Social Video Epyllion’s State of Video Gaming in 2026

Network Effects (Metcalfe’s Law)

Expanding Legalization

OnlyFans creators use all social media as the “front door” for user acquisition (and most social media platforms are OK with this)

Crypto & Memecoins

iGaming

Online Sports Betting Source: Eilers & Krejcik Gaming, Epyllion analysis

Today, 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

Since 2021, Americans decreased their annual expenditure on video game content, software, and services from $52.49B to $52.30B, a $190MM decrease

In parallel, Americans: • Increased their spend on OnlyFans + Online Sports Betting + iGaming from $11.3B to $32.8B in total, a $21.5B increase • Adopted new and costly pass -times that defy specific attribution, such as cryptocurrency and memecoin trading, AI assistants, AI art, and AI erotica, and prediction markets • Scaled their social video consumption by 120 million hours a day (21 minutes per person) These are nationwide figures, but much of this spend is concentrated on the same few Americans • It’s not quite true “Americans” lost say, $17B on sports betting; ~30MM Americans did • The $5B on OnlyFans? From barely 10MM Americans • Crypto? 22MM. Prediction markets? 9MM. iGaming? 32MM. … And these users massively over -index to video gaming, and especially high platforms (console and PC) and genres (shooters, sports sims)

-revenue -generating

Video gaming’s post -pandemic problem isn’t that players choose to watch TikTok instead of buy a AAA 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

Epyllion’s State of Video Gaming in 2026

Sources: Circana , Eilers & Krejcik Gaming, Fenix International, Ipsos, Epyllion analysis

American Men 18 – 34 are 1.4 – 2.0x as likely to play video games… and up to 3.6x as likely to use short -form video, OnlyFans, AI, and prediction markets, trade crypto, sports bet, and iGame Question: How frequently do you engage in the following; Answer: Multiple Times a Week or Daily (U.S. Only) (Ipsos Consumer Tracker; Surveyed January 13

Age & Gender Group

All U.S. Adults

Playing video games on a mobile device

18– 34 Men

Using GenAI assistants/apps (e.g., ChatGPT, Claude) Using AI for chatting or companionship (e.g., Character.ai, Replika , etc.)

15%

2.4x

Playing iGaming/ iCasino games (e.g., digital gambling games to win real money)

12%

2.6x

Online sports betting

12%

Actively trading cryptocurrencies (e.g., bitcoin, memecoins , etc.)

8%

Betting on or reviewing prediction markets (e.g., Polymarket , Kalshi)

7%

Using creator pornography (e.g. OnlyFans, Fansly )

5%

Epyllion’s State of Video Gaming in 2026

3.3x 3.6x 3.1x 3.0x

0.6x 1.2x

1.1x 1.4x

0.7x

0.9x 1.3x

2.0x

31%

All 55+

1.1x

1.2x

1.2x

62%

All 35 – 54

1.2x

2.0x

32%

Watching short form videos (e.g., TikTok, YouTube Shorts, Instagram Reels)

18– 34 Women 1.4x

45%

Playing video games on a PC or console

-14, 2026)

1.1x

0.6x 0.5x

1.1x

0.1x

1.0x

1.3x

0.3x

0.9x

1.1x

0.2x

1.3x

1.0x

0.1x

1.4x

1.1x

0.1x

1.1x

1.0x

0.2x

Sources: IPSOS, Epyllion

Altogether, Men 18 – 34 are 15% of the U.S. adult population but 21% of mobile gamers and 29% of PC/Console gamers… and 18 – 49% of regular users of novel interactive apps/services Total Share of Regular U.S. Users 18+ by Gender and Age (Ipsos Consumer Tracker; Surveyed January 13

-14, 2026; Use at Least Weekly) Total Users

Men 18 – 34 15%

Total Population 18+ Playing video games on a mobile device

Women 18 – 34 15%

21%

Playing video games on a PC or console

All 35 – 54 (32%)

18% 29%

Watching short form videos (e.g., TikTok, YouTube Shorts, Instagram Reels)

36% 30%

18%

39%

29%

16%

Using AI for chatting or companionship (e.g., Character.ai, Replika , etc.)

37%

Playing iGaming/ iCasino games (e.g., digital gambling games to win real money)

37%

37%

Actively trading cryptocurrencies (e.g., bitcoin, memecoins , etc.)

49%

13%

18%

Using creator pornography (e.g. OnlyFans, Fansly )

44%

16%

Epyllion’s State of Video Gaming in 2026

20%

30%

40%

25%

167MM 84MM 3% 40MM

50%

34%

30% 34% 32%

60%

70%

32MM

9%

17%

43%

10%

86MM

39%

Betting on or reviewing prediction markets (e.g., Polymarket , Kalshi)

0%

23%

39%

14% 46%

121MM

18%

21%

Online sports betting

270MM 26%

18%

18%

Using GenAI assistants/apps (e.g., ChatGPT, Claude)

All 55+ (39%)

80%

90%

6%

32MM

4%

22MM

5%

9MM

8%

13MM

100% Sources: IPSOS, Epyllion

And while 46 of every 100 Americans say they play games less than they used to (76 of whom still play), 59 of every 100 Americans 18 – 45 have cut back (92 of whom still play) Question: “I am playing video games less often than I used to” (U.S. Only) (Ipsos Consumer Tracker; Surveyed January 13 Somewhat Agree

Strongly Agree All 18+

21%

Men 18– 34

21%

Women 18– 34

Somewhat Disagree

25%

0%

5%

10%

Epyllion’s State of Video Gaming in 2026

15%

14%

28%

28%

17%

20%

25%

21%

16%

30%

35%

40%

24%

21%

32%

15%

Don’t Play _

10%

35%

24%

All 55+

Strongly Disagree

20%

30%

All 35– 54

-14, 2026)

45%

50%

55%

5%

9%

11%

10%

7%

18%

41%

60%

65%

70%

75%

80%

85%

90%

95%

100% Sources: IPSOS, Epyllion

New competition for time and spend, and which concentrates on key gamer demographics, helps to explain several ongoing and interrelated challenges to video gaming growth

Gamers Playing Few Games Overall

Buying/Trying Few Games

• The median Steam user plays only four games a year across their entire catalogue of new and old games (down from five in 2022) 1

• Only 3.1 -7.4% of global PC, PlayStation, & Xbox time goes to new, non -annual releases (and five games get half that time) 2 • 46% of U.S. gamers buy fewer than one game a year; 86% buy between none and four 3 • The average Steam user installs 3.8 games per year (down from 4.2 -5.2 pre -pandemic) 4 • Annual mobile game installs are now at a twelve year low in the U.S. 5

Concentrating Time on the Same Games

Concentrating Time on Free

• Since January 2021, the same five games (each 9 to 27 years old) have held 33 -56% of total PlayStation and Xbox hours every month 2

• Since January 2021, free -to-play games average 45% of all PlayStation and Xbox time 2

• Since January 2021, the same five games ( each 9 to 26 years old) have held 28 -40% of total PC hours 2

Epyllion’s State of Video Gaming in 2026

-

-to -Play

• Since January 2021, free -to-play games average 55% of all PC gaming time 2

Sources: 1 Valve, 2 Newzoo, 3 Circana, 4 Video Game Insights,

5 Sensor Tower, Epyllion analysis

Chapter I: Spending Growth but More Retrenchment and Margin Struggles in 2025 Chapter II: Why Growth is Scarcer Than Headlines Suggest

Chapter III: Video Games Are Losing the Attention War in the “Major Market 8” Chapter IV: The Novel Interactive Competitors Taking Attention, Time, and Spend from Video Games Chapter V: The Five Biggest Areas of Revenue Growth in the Video Game Industry in 2026 Chapter VI: Closing Thoughts on the “Industry” and Finding Growth in 2026

The Five Biggest Revenue Growth Areas in Video Gaming in 2026

“Non -Core Markets”

Epyllion’s State of Video Gaming in 2026

Advertising

D2C & Alternative Payment Channels

External Development

Roblox

The Five Biggest Revenue Growth Areas in Video Gaming in 2026

“Non -Core Markets”

Epyllion’s State of Video Gaming in 2026

Advertising

D2C & Alternative Payment Channels

External Development

Roblox

If the “Mature Market 8” have been flat -to -down since 2021, but the global market is up, then the industry’s growth must have come from so -called “non -core” countries Worldwide Consumer Spending on Video Game Software & Content (Nominal Prices; Arcade + Console + PC + Mobile + VR + Web; Excludes Hardware & Accessories) 195

$200B 185

185 177

$180B

171

170

$160B $140B

140

$120B $100B $80B

$60B $40B $20B $0B

2019

Epyllion’s State of Video Gaming in 2026

2020

2021

2022

2023

2024

Sources: Ampere, Bloomberg, CADPA, IDG Intelligence,

2025 Newzoo , Niko Partners, Sensor Tower, Epyllion analysis

Since 2021, the “Mature Market 8” have shrunk by $5.1B (or (+7.3%) and “non -core countries” are up $11.8B (or 41%)!

-4.5%), but China is up $3.3B

Worldwide Consumer Spending on Video Game Software & Content (Nominal Prices; Arcade + Console + PC + Mobile + VR + Web + Platform Services; Excludes Hardware & Accessories; Excludes VAT $200B

195 177

$180B

171

$160B

170 31

27

40

“ROW” +11.7%

48

China +7.6%

Mature Market 8 +1.4%

36

29

140 22

$120B $100B

28

3YR -CAGR Global +4.8%

185

185

$140B

)

45 39

42

45

102

104

105

107

2022

2023

2024

2025 (Prelim)

39

32

$80B

$60B 105 $40B

112

85

$20B $0B

2019

Epyllion’s State of Video Gaming in 2026

2020

2021

Sources: Ampere, CADPA, Circana, ESAC, Game Germany, IDG Intelligence, IIDEA, Kadokawa, KOCCA, Ministry of Science and ICT,

Newzoo , Niko, SELL, Sensor Tower,

Ukie , Epyllion Analysis

China : Previously reviewed, but note that the world’s second largest market still has a lot of headroom in player participation rates (especially PC and console) China: Video Gaming Participation Rate

China: Video Gaming Participation by Platform

(Population 5+)

(Population 5+)

80%

80%

75%

75%

70%

70%

65%

65%

60%

60%

55%

55%

50%

50%

45%

45%

40%

40%

35%

35%

30%

30%

25%

25%

20%

20%

15%

15%

10%

10%

5%

5%

0%

0%

Mobile

PC

2016

2017

2018

Epyllion’s State of Video Gaming in 2026

2019

2020

2021

2022

2023

2024

2025

Console

2016

2017

2018

2019

2020

2021

2022

2023

2024

2025

Source: Competitive Intelligence Unit (Mexico)

China : Not only the fastest -growing major market in both dollars and percentage, but over 25% of growth since 2022 is in PC/Console, making the market a true outlier China: PC/Console Video Game Software Sales

China: Mobile Video Game Software Sales

(Packaged Sales + Microtransactions + Subscriptions/Services)

(Packaged Sales + Microtransactions + Subscriptions/Services)

$36B $34B

$36B PC

$34B

Console

$32B

$32B

$30B

$30B

$28B

$28B

$26B

$26B

$24B

$24B

$22B

$22B

$20B

$20B

$18B

$18B

$16B

$16B

$14B $12B $10B

9.8

10.6

11.5 10.3 9.1

10.1

10.0

12.5

$14B $12B

10.1

33.1 32.0 30.4 28.7

22.9 20.3 17.2

12.3

$10B

8.9

$8B

$8B

$6B $4B

35.8

35.0

9.8

10.6

10.3

8.9

8.6

9.7

9.7

9.7

10.9

11.3

$6B $4B

$2B

$2B

$0B 2016

2017

2018

Epyllion’s State of Video Gaming in 2026

2019

2020

2021

2022

0.4 2023

0.6

1.2

2024

2025

$0B

2016

2017

2018

2019

2020

2021

2022

2023

2024

2025 Source: CADPA

Mexico : While participation rates tumble in the U.S. and Canada, Mexico continues to grow 0.5– 1.0 points each year. Mobile is up 11 points since the pandemic, Console and PC both +2 Mexico: Video Gaming Participation Rate

Mexico: Video Gaming Participation by Platform

(Population 12+)

(Population 12+)

80%

80%

75%

75%

70%

70%

65%

65%

60%

60%

55%

55%

50%

50%

45%

45%

40%

40%

35%

35%

30%

30%

25%

25%

20%

20%

15%

15%

10%

10%

5%

5%

0%

2016

2017

2018

Epyllion’s State of Video Gaming in 2026

2019

2020

2021

2022

2023

2024

2025

0%

Mobile

Console PC

2016

2017

2018

2019

2020

2021

2022

2023

2024

2025

Source: Competitive Intelligence Unit (Mexico)

Mexico : With PC/Console up a third since 2020 and mobile nearly doubled, the country now ranks 10th globally, beating the former #10 (Italy) by over 10%

$1.5B

Mexico: PC/Console Video Game Software Sales

Mexico: Mobile Video Game Software Sales

(Packaged Sales + Microtransactions + Subscriptions/Services)

(Packaged Sales + Microtransactions + Subscriptions/Services)

Combined PC/Console

1.42

$1.4B

$1.4B

1.32

$1.3B

$1.3B

$1.2B

1.16

1.17

1.19

$1.2B

1.07

$1.1B

$1.1B

$1.0B

$1.0B

$0.9B $0.8B

$1.5B

0.83

0.86

0.86

$0.9B

0.77

$0.8B

$0.7B

$0.7B

$0.6B

$0.6B

$0.5B

$0.5B

$0.4B

$0.4B

$0.3B

$0.3B

$0.2B

$0.2B

$0.1B

$0.1B

0.74 0.67

0.49

2016

2017

2018

Epyllion’s State of Video Gaming in 2026

2019

2020

2021

2022

2023

2024

2025

$0.0B

0.55

0.38 0.28

0.11 $0.0B

0.52

2016

0.14

2017

0.18

2018

2019

2020

2021

2022

2023

2024

2025

Sources: Newzoo , Sensor Tower

Brazil : With 73 – 80% of those age 16+ playing regularly, Brazil boasts a leading and durably high participation rate Brazil: Video Gaming Participation Rate

Brazil: Video Gaming Participation by Platform

(Population 16+)

(Population 16+)

85%

80%

80%

75%

75%

70%

70%

65%

65%

60%

60%

55%

55%

50%

50%

45%

45%

Mobile

40%

40%

35%

35%

30%

30%

25%

Console

20%

20%

PC

15%

15%

10%

10%

5%

5%

25%

0%

2016

2017

2018

Epyllion’s State of Video Gaming in 2026

2019

2020

2021

2022

2023

2024

2025

0%

2016

2017

2018

2019

2020

2021

2022

2023

2024

2025

Source: GoGamers (Pesquisa Game Brasil )

Brazil : Over the last three years, the PC/Console market has averaged over 6% annual growth and mobile 7% (by some estimates, Brazil is now a top 10 market globally)

$1.4B

Brazil: PC/Console Video Game Software Sales

Brazil: Mobile Video Game Software Sales

(Packaged Sales + Microtransactions + Subscriptions/Services)

(Packaged Sales + Microtransactions + Subscriptions/Services) 1.33

Combined PC/Console

$1.3B

$1.3B

1.26

$1.2B

1.20

1.16

$1.1B

$1.2B

1.11

1.11

$1.4B

$1.1B

$1.0B

$1.0B 0.91

$0.9B $0.8B

$0.9B

0.85 0.74

$0.8B

0.76

$0.7B

$0.7B

$0.6B

$0.6B

$0.5B

$0.5B

$0.4B

$0.4B

$0.3B

$0.3B

$0.2B

$0.2B

$0.1B

$0.1B

0.59 0.51

0.50

2019

2020

0.47

0.50

0.61

0.53

0.32 0.22

$0.0B

2016

2017

2018

Epyllion’s State of Video Gaming in 2026

2019

2020

2021

2022

2023

2024

2025

$0.0B

0.17

2016

2017

2018

2021

2022

2023

2024

2025

Source: Newzoo , Sensor Tower

Spain : Unlike many of its European peers, Spanish participation rates have continued to grow — and across all device platforms, and faster since the pandemic Spain: Video Gaming Participation Rate

Spain: Video Gaming Participation by Platform

(Population 6 – 64)

(Population 6 – 64)

80%

80%

75%

75%

70%

70%

65%

65%

60%

60%

55%

55%

50%

50%

45%

45%

40%

40%

35%

35%

30%

30%

25%

25%

20%

20%

15%

15%

10%

10%

Mobile

5% 0%

Reports in 2026

2016

2017

2018

Epyllion’s State of Video Gaming in 2026

2019

2020

2021

2022

2023

2024

2025

Console

PC

5% 0%

2016

2017

2018

2019

2020

2021

2022

2023

2024

2025

Source: Asociación Española de Videojuegos (AEVI)

Spain : From 2020 to 2024, Spanish PC/Console spend grew nearly 50% (or +$450MM per year), while Mobile grew 27% (or $135MM) Spain: PC/Console Video Game Software Sales

Spain: Mobile Video Game Software Sales

(Population 18+) $1.5B

(Population 18+) $1.5B

Combined PC/Console

1.41

$1.4B

$1.4B

1.31 $1.3B

$1.3B

$1.2B

$1.2B

1.13

$1.1B

$1.1B

1.01

$1.0B $0.9B

$0.9B

0.78

$0.8B $0.7B

$1.0B

0.96 0.90

$0.8B

0.72

$0.7B

0.63

$0.6B

$0.6B

$0.5B

$0.5B

$0.4B

$0.4B

$0.3B

$0.3B

$0.2B

$0.2B

$0.1B $0.0B

0.64

Not Yet Reported

2016

2017

2018

Epyllion’s State of Video Gaming in 2026

2019

2020

2021

2022

2023

2024

2025

0.50

0.54

0.53

0.55

0.40 0.34 0.25 0.20

$0.1B $0.0B

Not Yet Reported

2016

2017

2018

2019

2020

2021

2022

2023

2024

2025

Source: Asociación Española de Videojuegos (AEVI)

Across Southeast Asia and the Middle East & North Africa , more players continue to come online — and overall player participation rates tend to lead the world

90% 80% 70% 60% 50% 40% 30% 20% 10% 0%

2019

Indonesia

Malaysia

Philippines

Thailand

Vietnam

(Population 5 -64)

(Population 5 -64)

(Population 5 -64)

(Population 5 -64)

(Population 5 -64)

2021

2023

2025

90% 80% 70% 60% 50% 40% 30% 20% 10% 0%

Epyllion’s State of Video Gaming in 2026

2019

2021

2023

2025

2019

2021

2023

2025

2019

2021

2023

2025

Egypt

Saudi Arabia

United Arab Emirates

(Population 5 -64)

(Population 5 -64)

(Population 5 -64)

2019

2021

2023

2025

` Southeast Asia Middle East & North Africa Mobile PC

2019

2021

2023

2025

2019

2021

2023

2025

2019

2021

2023

2025

Sources: Niko Partners, IMF, Epyllion analysis

There are not just “more” players in Southeast Asia there’s also a lot more revenue and growth.

and the Middle East & North Africa

,

Annual Video Game Content & Software Sales (SEA -5: Indonesia + Malaysia + Philippines + Thailand + Vietnam; MENA $6.5B $6.0B

$6.4B

5YR -CAGR

$6.2B

MENA -3 (Mobile)

$5.9B

MENA -3 (PC) SEA -5 (Mobile)

$5.5B

-3: Egypt, Saudi Arabia, United Arab Emirates)

+5.5%

$5.4B

SEA -5 (PC) $5.0B

$5.0B

+4.3%

$4.4B

$4.5B $4.0B $3.6B $3.5B

+10.5% $3.0B $2.5B $2.0B $1.5B $1.0B

+5.1% $0.5B $0.0B

2019

Epyllion’s State of Video Gaming in 2026

2020

2021

2022

2023

2024

2025

Sources: Niko Partners, IMF, Epyllion analysis

During 2024 and 2025, Roblox’s hours exploded globally — but this growth was not led by “home markets.” APAC and ROW now pass UCAN by +78% and +51% Roblox UCAN Hours

Roblox European Hours

Roblox APAC Hours

Roblox ROW Hours

(By Quarter)

(By Quarter)

(By Quarter)

(By Quarter)

12B 11B 10B 9B 8B 7B 6B 5B 4B 3B 2B 1B 0B

Q4’18

Epyllion’s State of Video Gaming in 2026

Q4’22

Q4’25

Q4’18

Q4’22

Q4’25

Q4’18

Q4’22

Q4’25

Q4’18

Q4’22

Q4’25 Source: Roblox

All global gaming growth helps the overall video gaming industry, but the benefits don’t automatically accrue. Specific choices are needed.

Supporting Designing for Low -End “Low End” Devices Devices

Epyllion’s State of Video Gaming in 2026

Operating for “Low End” ARPU

Prioritizing Foreign Cultures Over “Local” Ones

As smartphones advance, there is a tremendous desire to “design up” to newer specs, thereby enabling richer graphics, animations, concurrent on -screen activities, etc.

Approximate Geekbench 6 Score for Core iPhone Models (Excludes Entry Editions, Special Editions, Pro/Max Editions, etc.)

40,000 Singe Core 35,000

Multi -Core Metal

30,000 25,000 20,000 15,000 10,000 5,000 0

4 2007 Epyllion’s State of Video Gaming in 2026

2010

5S

6 2015

17

8 X 2020

2025 Source: Geekbench

Yet many of the most popular games globally, even fast -twitch shooters, are designed to play well on iPhones 10 – 14 generations old (some older than the PlayStation 4!)

Annual iPhone Releases and Scope of Current Device Support for Top Mobile Games (Global; as of December 15, 2025) High -End Models Only

Assassin’s Creed, Resident Evil, etc.

Fortnite and Call of Duty Warzone: Mobile 5S, 6, and 6S dropped summer of 2025 due to Apple’s “forced upgrade cycle” for Xcode 16

Candy Crush

(iOS 17+)

Pokémon Go and eFootball (iOS 15+) Clash Royale

(iOS 14+)

Genshin Impact, Roblox, PUBG Mobile, Call of Duty: Mobile, Mon. Go

and Honor of Kings

(iOS 13+)

(iOS 12+)

Free Fire and Delta Force (iOS 11+) Peacekeeper Elite , also known as “PUBG Mobile China”

4 2007 Epyllion’s State of Video Gaming in 2026

2010

5S

6 2015

(iOS 10+)

17

8 X 2020

2025 Source: Apple App Store

To ensure every player has the best possible experience, Free Fire offers two app “versions,” both of which play and cross -play into the same “game,” but with different optimizations

Epyllion’s State of Video Gaming in 2026

Fire Fire – Android App Specs

Fire Fire MAX – Android App Specs

(As at Q4 2025)

(As at Q4 2025)

Android 5.1+

Minimum OS

Android 5.1 (Same)

0.8 GB

Initial Install Size

1.3 GB (1.7x)

2.1 GB

Fully Installed Disk Space

5.0 GB (2.4x)

2.0 GB

Minimum RAM

4.0 GB (2.0x)

3.0 GB

Recommended RAM

6.0 -8.0 GB (2.0 -2.66x)

450 meters

Map Draw Distance

900 meters (+100%)

No

Acoustic Audio Mapping

Yes

2D Static Menu

Lobby

3D Interactive

• Manual downloads of outfit packs (or opponents appear as stock Adam/Eve) • No special animations (e.g. reload, sprint) • Special effects degrade at 20 meters

Player Avatars

• Pre-cached and/or smart downloaded to ensure full support and at any visible distance

Sources: Google Play, Garena, Epyllion analysis

Why? Globally, 65% of Google Play video game revenue comes from low and mid devices. In markets such as LATAM, it’s 90%!

-tier

Share of 2024 Google Play Games Revenue by Device Type (Excludes transactions not billed by the Play store) 100% 90% 33%

30%

28%

22%

10%

High -End

47%

Mid -Tier

43%

Low -End

17%

80% 70% 60%

48% 47% 43%

50% 47% 40%

54%

30% 20% 23%

10%

29%

31%

Western Europe

APAC (Excl. Japan, Korea, Hong Kong, Taiwan)

35%

13% 0%

Japan, Korea, Hong Kong, Taiwan

Epyllion’s State of Video Gaming in 2026

North America

Eastern & Central Europe, Middle East & Africa

LATAM Source: Google / Mariusz Gąsiewski

Another challenge stems from operating economics. Companies must be set up to profit on, and practically invest behind, customers with a fraction of “major market” ARPU Share of Roblox DAU by Region

Quarterly Bookings per DAU

(As at Q4 2025)

Bookings by Region

(As at Q4 2025)

(As at Q4 2025) 55%

$50.9

32%

27% 25% 23%

18% 22% $15.4

$14.4

12% $6.3

11%

$5.6 n/a

US & Europe Canada Epyllion’s State of Video Gaming in 2026

APAC

ROW

Region Avg.

US & Europe Canada

APAC

ROW

WW Avg.

US & Europe Canada

APAC

ROW

Region Avg. Source: Roblox

Globally, average revenue per player by country per year can vary by as much as 200x, with most of the “mature markets” at $150 – 275, and “ROW” reaching the low single digits Average Annual Spending on Video Game Content per Gamer per Year (Most recent of 2025 or 2024; Some markets are Populations 5+, 10+, 18+, etc., which causes both sample bias and inflates or

def lates ARPU)

$600 $550 $500 $450 $400 $350 $300 $250 $200 $150 $100 $50 $0

Korea (10+)

Japan (5+)

Epyllion’s State of Video Gaming in 2026

U.S. (5+)

Singapore (16+)

U.K. (16+)

France (10+)

Germany (6+)

Italy (18+)

Spain (6+)

UAE (16+)

China (5+)

Sources: KOCCA, Kadokawa,

Saudia Arabia (16+)

Mexico (12+)

Thailand (16+)

Malaysia (16+)

Brazil (16+)

Vietnam Indonesia Philippines (16+) (16+) (16+)

Circana , Niko Partners, UKIE, Game Germany, IIDEA, AEVI, CADPA, CIU,

Egypt (16+)

Newzoo , GoGamers , Epyllion analysis

Garena’s Free Fire has over 650 million quarterly players, about 9.5% of whom pay ~$12 per quarter (thus the average user is only $0.40 a month), totaling roughly $3B per year Garena Quarterly Active Users and Quarterly Payers (Garena only reports QAUs, not MAUs of DAUs; Substantially all Free Fire) 750MM

13.50%

Paid Percent Rate Quarterly Non -Paying Active Users

12.15%

Quarterly Paying Active Users

600MM

10.80%

525MM

9.45%

450MM

8.10%

375MM

6.75%

300MM

5.40%

225MM

4.05%

150MM

2.70%

75MM

1.35%

0MM

Q1’18

Epyllion’s State of Video Gaming in 2026

Q1’19

Q1’20

Q1’21

Q1’22

Q1’23

Q1’24

Q1’25

Q4 2025

Paying Users Rate

QAUs

675MM

0.00%

Source: Sea Limited

Moreover, non -Western also prioritize these different (and generally less valuable) players by investing in content and experiences that are for them (and not for most Western players) Fortnite Events (Selection)

Epyllion’s State of Video Gaming in 2026

&

Call of Duty Events (Selection)

Vs.

PUBG Events (Selection)

&

Free Fire Events (Selection)

And prioritization is the operative word; events and integrations are not infinite, nor are the creative and commercial resources that support them Fortnite IP Events (2025; Meaningfully Integrated)

Epyllion’s State of Video Gaming in 2026

&

Call of Duty IP Events (2025; Meaningfully Integrated)

Vs.

PUBG Events (2025; Meaningfully Integrated)

&

Free Fire IP Events (2025; Meaningfully Integrated)

Despite the post -pandemic industry slump, PUBG, already one of the world’s bigger games, has been able to grow considerably through its PC, Mobile, and APAC -centric development Krafton Quarterly Revenue by Platform

Krafton Quarterly Revenue by Reporting Region

(USD) $650MM

(USD) $650MM

Console PC

$600MM

Americas & Europe South Korea

$600MM

Asia

Mobile

$550MM

$550MM

$500MM

$500MM

$450MM

$450MM

$400MM

$400MM

$350MM

$350MM

$300MM

$300MM

$250MM

$250MM

$200MM

$200MM

$150MM

$150MM

$100MM

$100MM

$50MM

$50MM

$0MM

Q1’19

Q1’20

Epyllion’s State of Video Gaming in 2026

Q1’21

Q1’22

Q1’23

Q1’24

Q1’25

$0MM

Q1’19

Q1’20

Q1’21

Q1’22

Q1’23

Q1’24

Q1’25 Source: Krafton

And beyond the Genshins and Wukongs are market -specific creations that defy Western conventions and expectations… but have generated $400MM in two years in those markets Love and Deepspace : Estimated Global Gross Revenue

Love and Deepspace Summary

(IAP Only; Excludes D2C/ Webshop Payments)

North America

Central & South America Europe MENA

$153MM APAC (Exc. China) $175MM

$1.52B China

Love and Deepspace is story -based live service romance game in the sci -fi action RPG genre. Users have five primary love interests and can unlock intimate memories and dates, while using their superhuman powers to combat alien monster invaders. A 2025 update added a period tracker for players.

Epyllion’s State of Video Gaming in 2026

Sources: CADPA, Sensor Tower, Epyllion analysis

The “ROW” opportunity is the positive way to view current hiring trends. It’s frustrating that hiring regions don’t match layoffs, but encouraging that they finally match revenues Global Video Game Layoffs (2022 – 2025)

Global Job Openings

10% Central, Latin, and South Americas, plus Caribbean

4%

APAC, China, Middle East, and Africa

19%

Europe

1%

4% , MENA 15%

(PC + Console + Mobile; Content Spend + Ads)

Remote C/L/SA/C MENA APAC (Excl. China)

4% 4%

C/L/SA/C MENA

22%

APAC

20%

China

20%

Europe

31%

North America

16% 25%

North America (Excl. California)

Global Content Revenues

(Mid -2025)

China

18% California

North America (California )

43%

22%

Europe

9%

North America Excl. California)

13%

2022 —2025 Epyllion’s State of Video Gaming in 2026

North America California)

Mid-2025 Sources: Always Supporting the Gaming Community (Amir Satvat), Ampere, CADPA, IDG Intelligence,

2025 Newzoo , Niko Partners, Sensor Tower, Epyllion analysis

The Five Biggest Revenue Growth Areas in Video Gaming in 2026

“Non -Core Markets”

Epyllion’s State of Video Gaming in 2026

Advertising

D2C & Alternative Payment Channels

External Development

Roblox

For years, it has been essentially absurd to tabulate industry revenue without ads. Outside of China, mobile game ads nearly match total consumer spending on PC/Console software Annual Video Game Software Revenues (Excl.

-China)

(PC + Console + Mobile; Spend on Content + Services; Programmatic Ads Only) $150B $140B

$130B $120B Mobile Spend

$110B $100B $90B $80B $70B $60B

PC Spend

$50B Mobile Game In -App Ads

$40B $30B $20B

Console Spend

$10B $0B

2019

Epyllion’s State of Video Gaming in 2026

2020

2021

2022

2023

2024

Sources: Ampere, CADPA, IDG Intelligence, McKinsey,

2025 Newzoo , Niko Partners, Sensor Tower, Epyllion analysis

Since 2021, mobile ads have been 37 – 145% of annual industry growth. Without ads, the market (excluding China) is up only $6.8B (or +4.8%), but with them, its +$35B (or +20%) Ads’ Share of Video Game Content Revenue Growth

Video Game Content Revenue, Including Ads

(Worldwide Non -China Market; Including Ads in Denominator)

(Worldwide Non -China Market)

150%

$220B Mobile Ads

Consumer Spend Contracted

140%

$200B

Consumer Spending

130% $180B

120% 110%

$160B

100%

$140B

90% 80%

$120B

70%

$100B

60% $80B

50%

$60B

40% 30%

$40B

20% $20B

10% 0%

2019

2020

Epyllion’s State of Video Gaming in 2026

2021

2022

2023

2024

2025

$0B

2019

2020

2021

2022

Sources: Ampere, CADPA, IDG Intelligence, McKinsey,

2023

2024

2025

Newzoo , Niko Partners, Sensor Tower, Epyllion analysis

Note, though, that 20 – 30% of gross revenue from mobile game in -app advertising is collected by ad exchanges such as AppLovin , IronSource , Google, etc., or ~$15B in 2025 Worldwide Gross Revenue from Programmatic In

-App Advertising in Mobile Games, Excluding China

(Blended Rate Across Exchanges/Stacks Varies by Year) $70B

Commission to Ad Exchanges

67

Net to Game Publishers

$65B $60B

57

$55B 50

$50B 44

$45B 38

$40B 34

$35B $30B

30

$25B $20B $15B

$10B $5B $0B

2019

Epyllion’s State of Video Gaming in 2026

2020

2021

2022

2023

2024

2025 Source: McKinsey

And tens of billions in ad revenue in mobile games is… ad spend from other mobile games.

“Your ad revenue is my UA; your UA is my revenue” (net of exchange fees and non -mobile UA) Mobile Gaming User Acquisition Spend

Annual Mobile Gaming UA as Share of Net Revenue

(Global, Excluding China; Includes Spend Outside Mobile Games)

(Global, Excluding China)

$28B

40%

$26B 35%

$24B $22B

30% $20B $18B

25%

$16B $14B

20%

$12B 15%

$10B $8B

10% $6B

$4B

5%

$2B $0B

2019

2020

Epyllion’s State of Video Gaming in 2026

2021

2022

2023

2024

2025

0%

2019

2020

2021

2022

2023

2024

2025

Sources: AppsFlyer , Sensor Tower, AppLovin , Niko Partners, Epyllion analysis

In fact, mobile gaming UA expenses have exceeded the app store fees on consumer spending since 2020 — and by 2027, ad exchange fees on ad revenue will likely pass them, too Largest Costs for Mobile Game Publishers (Worldwide excluding China; USD) $30.0B $27.5B

User Acquisition Costs Ad Network/Exchange Cuts Platform app store fees (iOS, Android)

$25.0B $22.5B $20.0B $17.5B $15.0B $12.5B $10.0B $7.5B $5.0B $2.5B $0.0B

2019

Epyllion’s State of Video Gaming in 2026

2020

2021

2022

2023

2024

2025

Sources: Sensor Tower, CADPA, Niko Partners and CODA, McKinsey, Epyllion analysis

Yet not all mobile gamemakers spend 32% of net revenues on UA, nor do all generate a third of revenues from ads UA Share of Net Revenue, Select Mobile Publishers (Most Recent Full Fiscal Year of 2024 and 2025; Zynga 2021

Ads Share of Net Revenue, Select Mobile Publishers

-2022)

(Most Recent Full Fiscal Year of 2024 and 2025)

50%

20%

40%

15%

30%

10%

20%

5%

10%

0%

0%

Epyllion’s State of Video Gaming in 2026

Zynga

25%

Stillfront

30%

Industry Weighted 60% Average

Playtika

70%

Pixel United

35%

Nexon

80%

Net Marble

40%

NCSoft

90%

Krafton

45%

Garena

100%

App Lovin

50%

Industry Weighted Average

Hungry Studio

SciPlay

Stillfront

Tripledot

Zynga

Sources: Sensor Tower, CADPA, Niko Partners and CODA, McKinsey, the companies, Epyllion analysis

Consider the fact that Royal Match , the 2nd highest grossing new game since 2020, had $1.1B in net revenue in 2023 and… spent $1.1B on UA! Dream Games’ 2023 P&L (USD; Last Year Publicly Available) $1.6B

$1.52B

$1.5B $1.4B $1.3B

$0.45B

$1.2B $1.1B $1.0B $0.9B $0.8B $0.7B $0.6B $1.06B

$0.5B

$1.07B

$0.4B $0.3B $0.2B $0.1B $0.0B $0.13B

-$0.1B

$0.13B

-$0.2B -$0.3B

Gross Revenues

Epyllion’s State of Video Gaming in 2026

Platform Fees

Net Revenue

User Acquisition Cost

All Other Costs

Operating Profit Source: Dream Games

Today, ads remain rare among PC/Console games and services (with the exception of on device/in -store ad units). But eventually, ads reach all addressable surface areas.

Epyllion’s State of Video Gaming in 2026

-

And advertising is (and has been) starting to come to PC and console gaming.

Epyllion’s State of Video Gaming in 2026

And in markets with decline players, flattened spend, free -to -play dominance, publishers will need to improve the monetization of low spenders and monetize non -spenders Mature Market 8: Mobile Game Content Spend

(Packaged Sales + Microtransactions + Subscriptions/Services)

(Packaged Sales + Microtransactions + Subscriptions/Services) $60B

$55B

$55B

$50B

$50B

$45B

$45B

Data Outstanding but Very Similar Figure

$60B

$40B $35B $30B $25B $20B $15B $10B

$5B $0B

2016

2017

2018

Epyllion’s State of Video Gaming in 2026

2019

2020

2021

2022

2023

2024

2025

Data Outstanding but Very Similar Figure

Mature Market 8: PC/Console Content Spend

$40B $35B $30B $25B $20B $15B $10B $5B $0B

2016

2017

2018

2019

2020

2021

2022

Sources: Circana , Game Germany, IIEDA, Kadokawa, KOCCA,

2023

2024

2025

Newzoo , SELL, UKIE, Federal Reserve Bank

The Five Biggest Revenue Growth Areas in Video Gaming in 2026

“Non -Core Markets”

Epyllion’s State of Video Gaming in 2026

Advertising

D2C & Alternative Payment Channels

External Development

Roblox

Of the $136B in content sales outside of China and excluding 1st -party platform games and services, store fees consumed $33.2B of gross revenues that might otherwise go to publishers Global Non -China Video Game Content/Software Platform Fees (Exc (Excludes alternative billing solutions such as direct payments, $140B

-1st -Party Platform Titles and Services) webshops , carrier billing, etc.)

$132.0B

$130B

$11.8B

$120B $9.0B $110B

$7.8B

$100B

$4.7B

$98.8B

Steam

Total net Reveues

$90B $80B $70B $60B $50B $40B $30B

$20B $10B $0B

Total Gross Revenues

Epyllion’s State of Video Gaming in 2026

iOS IAP

Android IAP

Console

Sources: Ampere, CADPA, IDG Intelligence, McKinsey, Microsoft, Morgan Stanley, Nintendo,

Newzoo , Niko Partners, Sensor Tower, Sony, Video Game Insights, Epyllion analysis

As a revenue opportunity, annual (non -China) platform fees rival many top markets combined, global investment in video game content, and is likely 150% of (non -China) profits Non -China Platform Fees

Player Spend by Market

(Excludes 1P Content Sales)

(PC+Console+Mobile ; Content Only)

Global Content Investment (PC+Console+Mobile )

Non -China Adj. Op. Income (PC+Console+Mobile , Excl. Platforms)

$42B $40B $38B $36B $34B $32B $30B

Saudi Arabia Thailand Brazil

Steam

$28B

Spain

$26B $24B

Mexico (#10)

Consoles South Korea (#4)

$22B $20B $18B $16B

Google Play

Russia (#9) Canada (#8)

France (#7)

Illustrative Gross Up for Remaining 50%

$14B $12B

U.K. (#6)

$10B $8B $6B

iOS

Japan (#3) Germany (#5)

$4B $2B $0B

Adj. Operating Income from the 50% of non -China, non-platform revenues that can be calculated

2025

Epyllion’s State of Video Gaming in 2026

2025

2025

2025

Sources: Ampere, CADPA, IDG Intelligence, McKinsey, Microsoft, Morgan Stanley, Nintendo,

2025 Newzoo , Niko Partners, Sensor Tower, Sony, Video Game Insights, Epyllion analysis

Many mobile publishers are already redirecting substantial and growing shares of their gross revenues to alternative (typically D2C) payment channels with far lower commissions Share of Total Player Spend Generated via Direct

-to -Consumer Channels

(Global) 52.5%

Stillfront

50.0% 47.5% 45.0% 42.5% 40.0%

Playtika Huuuge

37.5% 35.0% 32.5% 30.0% 27.5% 25.0%

SciPlay

22.5% 20.0%

Ten Square

17.5% 15.0% 12.5% 10.0%

7.5% 5.0%

2.5% 0.0%

Q1 ’22

Q2 ’22

Epyllion’s State of Video Gaming in 2026

Q3 ’22

Q4 ’22

Q1 ’23

Q2 ’23

Q3 ’23

Q4 ’23

Q1’ 24

Q2 ’24

Q3’ 24

Q4’ 24

Q1 ’25

Q2 ’25

Q3 ’25

Q4 ‘25

Source: Huuuge , Playtika , Ten Square, SciPlay , Stillfront , Epyllion analysis

In fact, D2C stores are partly why topline mobile growth has slowed; gamemakers discount gross prices to encourage D2C/ webshop adoption that offer better net sales economics Playtika Player Spend

SciPlay Player Splend

Stillfront Player Spend

(Millions; USD; Excludes Ads)

(Millions; USD; Excludes Ads)

(Millions; USD; Excludes Ads)

$700 $600 $500 $400 $300 $200 $100 $0

2022

$90 $80 $70 $60 $50 $40 $30 $20 $10 $0 Q1’2022

2023

2024

2025

$220 $200 $180 $160 $140 $120 $100 $80 $60 $40 $20 $0

$160 $140 $120 $100

$80 $60 $40 $20 2022

2023

2024

2025

Huuuge Player Spend

Ten Square Player Spend

(Millions; USD; Excludes Ads)

(Millions; USD; Excludes Ads)

$0

2022

2023

2024

$30

D2C Gross Spend

$25

Third -Party Channel Gross Spend

2025

Net Revenue

$20 $15 $10 $5

2023

Epyllion’s State of Video Gaming in 2026

2024

2025

$0

2022

2023

2024

2025 Source: Huuuge , Playtika , Ten Square, SciPlay , Stillfront , Epyllion analysis

Across five mobile publishers with leading D2C adoption (and ~$4.4B in total player spend in 2025), gross sales are down 0.2% since Q1’23 but (more the important) net sales are up 6% Player Gross Revenue of 5 Mobile Publishers

Player Net Revenue of 5 Mobile Publishers

(Playtika , ScfiPlay , Stillfront , Huuuge , Ten Square)

(Playtika , ScfiPlay , Stillfront , Huuuge , Ten Square; Estimated)

-$2.5MM | -0.2% $1.10B

$1.10B

$1.00B

$1.00B

$0.90B

$0.90B

$0.80B

$0.80B

$0.70B

Playtika

$0.70B

$0.60B

$0.60B

$0.50B

$0.50B

$0.40B

$0.40B SciPlay

$0.30B

$0.30B $0.20B

$0.20B

Stillfront

$0.10B $0.00B

+$49MM | +6.0%

Q1’23 Q2’23 Q3’23 Q4’23 Q1’24 Q2’24 Q3’24 Q4’24 Q1’25 Q2’25 Q3’25 Q4’25

Epyllion’s State of Video Gaming in 2026

Huuuge Ten Square

$0.10B $0.00B

Q1’23 Q2’23 Q3’23 Q4’23 Q1’24 Q2’24 Q3’24 Q4’24 Q1’25 Q2’25 Q3’25 Q4’25 Source: Huuuge , Playtika , Ten Square, SciPlay , Stillfront , Epyllion analysis

But to maximize D2C adoption, publishers must do more than offer valuable discounts, fun perks, and simple user journeys. They must also support scores of payment solutions Appcharge Transaction Value by Payment

Total Market Transaction Value by Payment

(USD; December 24, 2024 to June 22, 2025) 100%

(USD; 2025) Credit Card

100%

PayPal

90%

Apple Pay

Apple Pay

90%

Google Pay

80%

Link Amazon Pay Afterpay

80%

Klarna Blik Checkout Przelewy24

Google Pay Kakao Pay LINE Pay

60%

iDEAL

50%

Docomo Pay GoPay

70%

Venmo

60%

Codashop Dana

Cash App Pay

70%

Alipay

MAYA Momo

50%

Naver Pay OVO PayPay

40%

40%

Rakuten Pay Razer Gold

30%

30%

Samsung Pay ShopeePay

20%

20%

True Money UniPin WeChat Pay

10%

10%

ZaloPay zz Other O thers 19 Providers

0%

Epyllion’s State of Video Gaming in 2026

0%

Sources: Appcharge, Niko Partners

In Q4 2021, only about 12.7% of Roblox’s revenues were D2C, resulting in platform fees devouring 27% of gross revenues. Today, the former is up to 30% and latter down to 22% Roblox Cost of Revenue as a Share of Gross Revenue

Roblox Estimated Share of Revenue That’s D2C

(As Reported)

(Assuming Non -Platform Store Costs at ~4.5%)

30%

34%

29%

32%

28%

30% 28%

27%

26%

26%

24%

25%

22%

24%

20%

23%

18%

22%

16%

21%

14% 12%

20%

10%

19%

8%

18%

6%

17%

4%

16% 15% Q1 2018

2% 0%

Q1 2019

Q1 2020

Epyllion’s State of Video Gaming in 2026

Q1 2021

Q1 2022

Q1 2023

Q1 2024

Q1 2025

Q1 2018

Q1 2019

Q1 2020

Q1 2021

Q1 2022

Q1 2023

Q1 2024

Q1 2025

Sources: Roblox, Epyllion analysis

Roblox’s improvements in alternative payment share since Q4 2021 have saved it roughly $420MM in payment fees (over $50MM in Q4 2025 alone) Cumulative Increase in Net Revenue from Alternative Payment Share Gains Since Q1 2022 (Global) $450MM $422 $400MM

$51 $371

$350MM

$55 $316

$300MM $273 $250MM

$230 $194

$200MM $161 $150MM

$129 $101

$100MM

$79

$50MM

$0MM

$3

Q1 2022

$13 $9 Q2 2022

Epyllion’s State of Video Gaming in 2026

$20 $7

Q3 2022

$27 $7

Q4 2022

$45 $17

Q1 2023

$58 $14

$21

Q2 2023

Q3 2023

$43

$43

$37

$32

$32

$28

$22

Q4 2023

Q1 2024

Q2 2024

Q3 2024

Q4 2024

Q1 2025

Q2 2025

Q3 2025

Q4 2025

Sources: Roblox, Epyllion analysis

Behind Roblox’s D2C success is not just large D2C discounts, but lucrative D2C subscriptions (which many parents use for allowance) that effectively boxes out in Roblox D2C/Gift Card Extra

Robux versus IAP

-only Robux -app buys

Roblox Premium Membership SKUs

(As of January 2026)

(As of January 2026)

D2C and Gift Card customers get up to 25% more Robux per dollar than in -app buyers

Cheapest & highest value monthly Robux subscriptions are only available D2C/online

Premium subscribers can get 35% more Robux per dollar out of IAP

Monthly Robux Subscribers Get +10% Robux on additional Robux purchases + item trading

Epyllion’s State of Video Gaming in 2026

Source: Roblox

At Epic Games Store on PC, IAP fees are only 12% (and often less), but a growing share of rd -Party hours were direct publishers use their own billing solutions. In 2025, 35% of 3 Epic Games Store: Billions of Hours of Playtime on 3 (Excludes 1

rd -Party Content

st -Party titles and platforms such as Fortnite, Rocket League, UEFN, etc.)

3.00B Using EGS Payments 2.75B

Using Alternative/D2C Payments

2.7

2.8

Split Unknown 2.50B

2.4 2.3

2.25B

2.1

2.0

2.00B

1.8 1.75B 1.50B 1.25B

1.2

1.00B 0.75B 0.50B

1.0

0.25B 0.00B

2019

Epyllion’s State of Video Gaming in 2026

2020

2021

2022

2023

2024

2025 Source: Epic Games

The Five Biggest Revenue Growth Areas in Video Gaming in 2026

“Non -Core Markets”

Epyllion’s State of Video Gaming in 2026

Advertising

D2C & Alternative Payment Channels

External Development

Roblox

In 2025, outsourcing held a record 35.5% share of total content investment spend, up from 30.6% in 2017 and roughly 31.5% during the COVID -19 Content Development Spend by Type (Worldwide; PC + Console + Mobile + VR) $42.5B $40.0B

Outsourced In -House

$37.5B $35.0B $32.5B

$27.5B

$25.5 (64.9% )

$26.3 (64.8% )

$26.7 (64.5% )

2023

2024

2025

$25.5 (65.5% )

2021

2022

$9.1 (32.4% )

$22.5B

$17.5B

$25.1 (68.3% )

$9.8 (31.1% )

$25.0B

$20.0B

$14.7 (35.5% )

$13.8 (35.1% )

$11.6 (31.7% )

$30.0B

$14.3 (35.2% )

$13.5 (34.5% )

$6.5 (30.6% )

$7.7 (31.6% )

$15.0B $12.5B $10.0B $7.5B

$14.8 (69.4% )

$16.8 (68.4% )

$19.0 (67.6% )

$21.6 (68.9% )

$5.0B $2.5B $0.0B

2017

Epyllion’s State of Video Gaming in 2026

2018

2019

2020

Sources: IDG Intelligence

Outsourcing’s recent growth stems from a near -doubling of its share of net new content investment, representing ~65% from 2022 – 2025 (versus 33% from 2018 – 2022) Growth in Video Game Content Development Spend

Outsourced Share of Total YoY Increase

(Worldwide; PC + Console + Mobile + VR)

(Worldwide; PC + Console + Mobile + VR)

$5.5B

130% Outsourced Insourced

$5.0B

120% 110%

$4.5B

35% 100%

$4.0B

90%

$3.5B

80%

$3.0B $2.5B

38%

20% 70%

38%

60% $2.0B 50% $1.5B

79%

40% 38%

$1.0B $0.5B

20% 122%

$0.0B -$0.5B

30% 46% 10%

2018

2019

Epyllion’s State of Video Gaming in 2026

2020

2021

2022

2023

2024

2025

0%

2018

2019

2020

2021

2022

2023

2024

2025

Sources: IDG Intelligence, Epyllion analysis

Behind outsourcing growth is mostly not QA, localization, or testing, but an increasing reliance on outside partners for core creative work (art, game design, game engineering, etc.)

Growth in Outsourcing by Work Type

Growth in Outsourcing by Work Type

(Worldwide; PC + Console + Mobile + VR)

(Worldwide; PC + Console + Mobile + VR)

$9.0B 2017

$8.5B

2025

$8.0B $7.5B

$7.0B $6.5B $6.0B $5.5B

Upstream (Art & Animation, Game Engineering, Coding, and Design)

$5.0B $4.5B $4.0B

16%

Midstream (Functional QA, Localization QA Audio Development)

74%

$3.5B

10%

$3.0B $2.5B

Downstream (Localization, Player Support)

$2.0B $1.5B $1.0B $0.5B $0.0B

Upstream

Epyllion’s State of Video Gaming in 2026

Midstream

Downstream Sources: IDG Intelligence

“Lack of local resources” was the 3 2025. “Cost savings” went from 5

rd most cited reason to use outsourcing in 2022, but 6 th to 2 nd , flexible staffing models stayed at 1

th in

st , but grew

Why Developers/Publishers Report Working With External Development Service Providers (2025; Respondents to the XDS Summit’s Annual Survey) 75% 2022

2025

70% 65% 60% 55% 50% 45% 40% 35% 30% 25% 20% 15% 10%

5% 0%

Flexible Skillset

Epyllion’s State of Video Gaming in 2026

Build More Content

Access Hard to-Find Skills

Cost Savings

Lack of Local Resources

Support Content Needs

Speed Up Development

Other Source: XDS Summit

Gamemakers also report substantial increases in the share of their engineering work that’s outsourced, with most categories up 5 percentage points since 2023 Proportion of Work Outsourced Among Outsource Users

– Engineering and Co

-Development Activities

(Respondents to the XDS Summit’s Annual Survey) 100% 95%

2023

2025

Rapid Prototyping

Dev. Ops

90% 85% 80% 75%

70% 65% 60% 55% 50% 45% 40% 35% 30% 25% 20% 15% 10% 5% 0%

Epyllion’s State of Video Gaming in 2026

Level Engine Dev. Design/Building

Server Side Dev.

Front End Dev.

Full SKU Console Dev.

Full SKU Mobile Dev.

Gameplay Eng.

UI Eng.

Tools Dev.

Full -Stack Eng.

Web Dev.

PC/Console Co -Dev.

Mobile Co -Dev.

Porting

Source: XDS Summit

In creative disciplines, many outsource users report 60 -95% of total work on animations, audio, environmental design, weapons, etc., is outsourced, up 4 – 5 points in two years Proportion of Work Outsourced Among Outsource Users

– Creative Disciplines

(Respondents to the XDS Summit’s Annual Survey) 100% 95%

2023

2025

90% 85% 80% 75%

70% 65% 60% 55% 50% 45% 40% 35% 30% 25% 20% 15% 10%

3D Char.

3D Props

3D Weapons

3D Vehicles

3D Animations

2D Char.

(Concepts)

2D Props (Concepts)

Cutscene Animation

2D Animation

2D Vehicle (Concepts)

Cinematics

Audio / SFX

2D Weap .

(Concepts)

Marketing Assets

3D Enviorn .

2D Environ (Concepts)

MoCap

Illustrations

VFX

2D Level Concepts

UX Design

UI Design

Epyllion’s State of Video Gaming in 2026

3D Levels

Narrative Writing

Game Design

0%

Info Design

5%

Source: XDS Summit

Furthermore, many of the most creatively and commercially successful titles of the last few years have been substantial users of external development

Internal Team Cherry Credits : 3

Internal Pocketpair Credits : 97

External Credits : 94 Excluding unnamed contributors

External Credits : 93 (80 from Keywords Studios) Excluding unnamed contributors

Epyllion’s State of Video Gaming in 2026

Source: MobyGames

The Five Biggest Revenue Growth Areas in Video Gaming in 2026

“Non -Core Markets”

Epyllion’s State of Video Gaming in 2026

Advertising

D2C & Alternative Payment Channels

External Development

Roblox

As reviewed earlier, Roblox is now a singular driver of the total video gaming market. In 2025, it was over 4.5% of non -China spend (and 40% of net growth) Non -China Consumer Spend

Roblox Share of Non

(PC + Console + Mobile; Content + Services)

-China Spend

Roblox Share of Non

(PC + Console + Mobile; Content + Services)

$150B

-China Growth

(PC + Console + Mobile; Content + Services)

5.0%

40%

Roblox $140B 4.5%

35%

$130B $120B

4.0% 30%

$110B 3.5% $100B $90B

25%

3.0%

$80B 2.5%

20%

$70B $60B

2.0%

More Than 100% Net as Overall Market Shrank in 2022 but Roblox Grew

15%

$50B

1.5% $40B

10%

$30B

1.0%

$20B

5%

0.5% $10B $0B

2019

2020

2021

Epyllion’s State of Video Gaming in 2026

2022

2023

2024

2025

0.0%

2019

2020

2021

2022

2023

2024

2025

0%

2019

Sources: Ampere, CADPA, IDG Intelligence,

2020

2021

2022

2023

2024

2025

Newzoo , Niko Partners, Roblox, Sensor Tower, Epyllion analysis

At the end of 2024, Roblox had more DAU than PlayStation, Switch, or Xbox. A year later, DAU were up another 69% (with 3x as many DAU added as in the first year of COVID) Roblox Average DAUs by Age by Quarter

Roblox Average DAUs by region by Quarter

(Global)

(Global)

160MM

160MM

Over 13

150MM

ROW

Under 13

150MM

Unstated

140MM

Europe

130MM

130MM

US & Canada

120MM

120MM

110MM

110MM

100MM

100MM

90MM

90MM

80MM

80MM

70MM

70MM

60MM

60MM

50MM

50MM

40MM

40MM

30MM

30MM

20MM

20MM

10MM

10MM

140MM

0MM

Q1’18

Q1’19

Q1’20

Epyllion’s State of Video Gaming in 2026

Q1’21

Q1’22

Q1’23

Q1’24

Q1’25

0MM

APAC

Unknown

Q1’18

Q1’19

Q1’20

Q1’21

Q1’22

Q1’23

Q1’24

Q1’25 Source: Roblox

And Roblox’s engagement surged even more than DAU. In just Q3 2025, Roblox amassed more hours of use than it achieved in the entire first year of the pandemic Roblox Avg. Monthly Hours of Engagement (Launch to Date; Excludes Off 14B

-Platform Engagement such as YouTube and Twitch; Mobile Share of Engagement by Year Average)

Mobile

13B

Console & VR Desktop/Laptop

12B 11B 10B 9B 8B 7B 6B 5B 4B 3B 2B 1B

2007

2008

Epyllion’s State of Video Gaming in 2026

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

2024

2025

Sources: Roblox, Epyllion analysis

Indeed, Roblox averages more monthly engagement than Steam, PlayStation, and Fortnite combined.

Monthly Hours of Engagement, 2025 (2024 Where Noted) (Worldwide; Excludes Off -Platform Engagement Such as Watching PlayStation or

Fortnite Streams on YouTube, Twitch, TikTok, etc.)

10.5B 10.0B 9.5B 9.0B 8.5B 8.0B 7.5B 7.0B 6.5B 6.0B 5.5B 5.0B 4.5B 4.0B 3.5B 3.0B

3rd -Party

2.5B

3rd -Party

2.0B

Rest of Market

1.5B

Rest of Portfolio The Sims

1.0B

0.5B 0.0B

Dota 2 1st -Party

FC 1st -Party

(2024 Avg.) Epyllion’s State of Video Gaming in 2026

Rest of Portfolio

Video Game Livestreaming (Excl. China)

UEFN Counter -Strike

3rd -Party 1 st -Party

Battle Royale

(2024 Avg.) Sources: Roblox, SteamDB , Sony, EA, StreamHatchet , Fortnite.GG, Blizzard, Epic Games, Scopely, Sensor

Tower,Epyllion analysis

In fact, Roblox is starting to challenge Netflix for total hours of use. In 2025, Roblox hit 65% of Netflix’s hours (82% in Q3), and while Netflix grows ~1% a year, Roblox manages 25

– 70%

Roblox Avg. Monthly Hours of Engagement (Launch to Date; Excludes Off

-Platform Engagement such as YouTube and Twitch; Mobile Share of Engagement by Year Average)

17B 16B

Netflix

15B 14B 13B 12B 11B 10B 9B 8B 7B 6B 5B 4B 3B 2B 1B

2007

2008

Epyllion’s State of Video Gaming in 2026

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

2024

2025

Sources: Roblox, Epyllion analysis

What’s more, Roblox’s top titles now match the top non -Roblox games and even in monthly engagement despite having a tiny fraction of the budget and staff

publishers

Average Monthly Hours of Engagement, Select Standalone Games/Publishers vs. Top 10 Roblox Titles (Worldwide; Excludes Off -Platform Engagement Such as Watching PlayStation or

Fortnite Streams on YouTube, Twitch, TikTok, etc.)

1.2B Roblox Titles (Months in Market if Launched Mid

-Year)

1.1B 1.0B 0.9B

PC & Console

0.8B

10 Mo. Avg.

0.7B

UEFN

7.5 Mo. Avg.

9 Mo. Avg.

Steal a Brainrot

99 Nights in the Forest

0.6B 0.5B 0.4B 0.3B

All Titles

Mobile Battle Royale

0.2B 0.1B 0.0B

Grow a Garden 2024 Avg.

Epyllion’s State of Video Gaming in 2026

Brook haven RP

Blox Fruits

The Sims

Fish It!

Dead Rails

Forsaken

RIVALS

Fisch

Sources: Epic Games, EA, Blizzard, Valve, Roblox, Scopely, Epyllion analysis

And these developers are now taking home $1.5B per year, with Q4 2025 hitting $477MM, up more than 70% year -over-year Roblox Quarterly Developer Payments (Worldwide) $500MM $450MM $400MM

$350MM $300MM $250MM $200MM $150MM $100MM $50MM $0MM

Q1’18

Epyllion’s State of Video Gaming in 2026

Q1’19

Q1’20

Q1’21

Q1’22

Q1’23

Q1’24

Q1’25 Source: Roblox

Roblox’s growth is also supported by an unprecedented $1.6B in annual R&D expenditures – an investment that continues to grow while shrinking rapidly as a percentage of revenue Roblox Quarterly R&D Expense and R&D Expense as TTM Share of net Revenue (GAAP) $400MM

65% 60%

$350MM

55%

50%

$300MM

R&D Expense

$250MM

40% 35%

$200MM

30% 25%

$150MM

20% $100MM

R&D as a Share of Net Revenue

45%

15%

10%

$50MM

5% $0MM

Q1’18

Epyllion’s State of Video Gaming in 2026

Q1’19

Q1’20

Q1’21

Q1’22

Q1’23

Q1’24

Q1’25

0%

Source: Roblox

Overall, Roblox exhibits classic creative disruption. It has built outstanding scale, network effects, revenues, and now profits while monetizing a fraction of the market average Roblox Bookings by Year

Roblox Adj. Operating Cash Flow

Revenue per Hour

(Worldwide)

(Stock -Based Compensation Added Back In)

(Based on Gross Bookings, Excl. Platform Services)

$7.0B

$0.7B

$0.50

$6.5B

$0.6B

$0.45

$6.0B

PlayStation

$0.5B $0.40

$5.5B $0.4B $5.0B

$0.35 $0.3B

$4.5B

Steam $0.30

$4.0B

$0.2B

$3.5B

$0.1B

$0.25

$3.0B

$0.0B

$0.20

$2.5B

Roblox

($0.1B)

UCAN

$0.15

$2.0B ($0.2B) $1.5B

$0.10 ($0.3B)

$1.0B

$0.0B

$0.05

($0.4B)

$0.5B 2019

2020

2021

Epyllion’s State of Video Gaming in 2026

2022

2023

2024

2025

($0.5B)

Global Avg. Europe APAC ROW

2019

2020

2021

2022

2023

2024

2025

$0.00

2019

2020

2021

2022

2023

Sources: Roblox, IDG Intelligence, Video Game Insights, Alinea, Sony,

2024

2025

SteamDB , Epyllion analysis

Chapter I: Spending Growth but More Retrenchment and Margin Struggles in 2025 Chapter II: Why Growth is Scarcer Than Headlines Suggest

Chapter III: Video Games Are Losing the Attention War in the “Major Market 8” Chapter IV: The Novel Interactive Competitors Taking Attention, Time, and Spend from Video Games Chapter V: The Five Biggest Areas of Revenue Growth in the Video Game Industry in 2026 Chapter VI: Closing Thoughts on the “Industry” and Finding Growth in 2026

To Find Growth, We Have to Acknowledge: There is No “Video Gaming Industry”

To Find Growth, We Have to Acknowledge: There is No “Video Gaming Industry” There are Many.

There are many ways to cut the video game industry, each facing its own dynamics and sub dynamics, and not all offer similar opportunities or adjacencies

-

Global ‘TAM’ for Video Game Content by Various Categories/Definitions (Nominal Prices; Console + PC + Mobile; Excludes Hardware & Accessories; Includes Game Sales, DLC, Microtransactions, Subscri

pti ons, and Services, and Ads)

$275B $250B

Console (Player Spend) 15.7%

$225B $200B

PC (Player Spend) 15.3%

$175B Mobile (Ads) 26.6%

$150B

LATAM 3.4% MEA 3.5%

Platform Services 4.3% Packaged Sales 12.0%

China 19.7%

PC/Console (AAA) 24.7%

Mobile (Hyper/Hybrid -Casual) 6.6%

APAC (Excl. -China) 22.4%

Mobile (Casual) 25.3%

$125B Europe 20.6%

$100B

PC/Console (Indie) 2.2% PC/Console (AA) 4.2%

Live Service (Inc. Ads) 83.7%

$75B $50B

Mobile (Player Spend) 42.4%

Mobile (Mid -Core) 37.1%

North America 30.5%

$25B $0B

By Device

Epyllion’s State of Video Gaming in 2026

By Region

By Content Model

Sources: Ampere, Bloomberg, CADPA, IDG Intelligence, McKinsey, Microsoft, Nintendo,

By Class Newzoo , Niko Partners, Sensor Tower, Sony, Video Game Insights, Epyllion analysis

Some segments are growing at a fraction of the size of the overall market, while others are growing at multiples of it Global ‘TAM’ for Video Game Content by Various Categories/Definitions,

Plus Growth Rates Relative to Total Market

(Nominal Prices; Console + PC + Mobile; Excludes Hardware & Accessories; Includes Game Sales, DLC, Microtransactions, Subscri

pti ons, and Services, and Ads)

$275B $250B

Console (Player Spend) 15.7%

0.7x

$225B $200B

PC (Player Spend) 15.3%

China 19.7%

Mobile (Ads) 26.6%

1.0x 1.4x

Platform Services 4.3%

1.8x

Packaged Sales 12.0%

0.6x

1.1x

PC/Console (Indie) 2.1% PC/Console (AA) 4.1%

-1.1x 1.7x

PC/Console (AAA) 24.8%

0.9x

Mobile (Hyper/Hybrid -Casual) 6.6%

2.6x

Mobile (Casual) 25.3%

0.9x

Mobile (Mid -Core) 37.1%

1.0x

0.9x

$175B $150B

LATAM 3.4% MEA 3.5%

APAC (Excl. -China) 22.4%

1.0x

2.1x

$125B $100B

Europe 20.6%

1.3x

North America 30.5%

0.7x

Live Service (Inc. Ads) 83.7%

1.0x

$75B $50B

Mobile (Player Spend) 42.4%

0.5x

$25B $0B

By Device

Epyllion’s State of Video Gaming in 2026

By Region

By Content Model

Sources: Ampere, Bloomberg, CADPA, IDG Intelligence, McKinsey, Microsoft, Nintendo,

By Class Newzoo , Niko Partners, Sensor Tower, Sony, Video Game Insights, Epyllion analysis

And each sub -cut represents a

very different share of growth.

Global ‘TAM’ for Video Game Content by Various Categories/Definitions,

Plus Share of Growth in Categories/Definitions

(Nominal Prices; Console + PC + Mobile; Excludes Hardware & Accessories; Includes Game Sales, DLC, Microtransactions, Subscri

pti ons, and Services, and Ads)

$275B $250B

Console (Player Spend) 15.7%

12%

$225B $200B

PC (Player Spend) 15.3%

China 19.7%

Mobile (Ads) 26.6%

3% 5%

Platform Services 4.3%

7%

Packaged Sales 12.0%

8%

22%

PC/Console (Indie) 2.1% PC/Console (AA) 4.1%

-3% 7%

PC/Console (AAA) 24.8%

23%

Mobile (Hyper/Hybrid -Casual) 6.6%

15%

Mobile (Casual) 25.3%

23%

Mobile (Mid -Core) 37.1%

36%

15%

$175B $150B

LATAM 3.4% MEA 3.5%

APAC (Excl. -China) 22.4%

22%

52%

$125B $100B

Europe 20.6%

26%

North America 30.5%

22%

Live Service (Inc. Ads) 83.7%

85%

$75B $50B

Mobile (Player Spend) 42.4%

22%

$25B $0B

By Device

Epyllion’s State of Video Gaming in 2026

By Region

By Content Model

Sources: Ampere, Bloomberg, CADPA, IDG Intelligence, McKinsey, Microsoft, Nintendo,

By Class Newzoo , Niko Partners, Sensor Tower, Sony, Video Game Insights, Epyllion analysis

The result is that different companies in the “video gaming industry” exist in very different universes and experience fundamentally different growth prospects Global ‘TAM’ for Video Game Content by Various Categories/Definitions (Nominal Prices; Console + PC + Mobile; Excludes Hardware & Accessories; Includes Game Sales, DLC, Microtransactions, Subscri

pti ons, and Services, and Ads)

$275B $250B

Console (Player Spend) 15.7%

$225B $200B

PC (Player Spend) 15.3%

$175B Mobile (Ads) 26.6%

$150B

LATAM 3.4% MEA 3.5%

Platform Services 4.3% Packaged Sales 12.0%

China 19.7%

PC/Console (AAA) 24.8%

Mobile (Hyper/Hybrid -Casual) 6.6%

APAC (Excl. -China) 22.4%

Mobile (Casual) 25.3%

$125B Europe 20.6%

$100B

PC/Console (Indie) 2.1% PC/Console (AA) 4.1%

Live Service (Inc. Ads) 83.7%

$75B $50B

Mobile (Player Spend) 42.4%

Mobile (Mid -Core) 37.1%

North America 30.5%

$25B $0B

By Device

Epyllion’s State of Video Gaming in 2026

By Region

By Content Model

Sources: Ampere, Bloomberg, CADPA, IDG Intelligence, McKinsey, Microsoft, Nintendo,

By Class Newzoo , Niko Partners, Sensor Tower, Sony, Video Game Insights, Epyllion analysis

Strategic Consulting

Speeches, Events, Offsites, and Workshops

mb@epyllion.co mball.assistant@epyllion.co press@epyllion.co

M&A Advisory

Special thanks to the firms below for supporting custom analysis for this presentation.

(Placement order is based on an RNG weighted to total citations)

Video Gaming Industry Data Providers

Video Gaming Trade Associations

iGaming

Other Data

datadashboards

By Matthew Ball

The State of Video Gaming in 2026 (Or “Growth and Where to Find It”)

Last Update: May 15, 2026 www.epyllion.co