A June study by Circana, reported by the Wall Street Journal, found that 18- to 24-year-olds reduced their spending by 13 percent from January to April 2025 compared to last year. Spending on video games fell even more sharply, dropping nearly 25 percent.
Older generations, by comparison, saw their spending on games fall by less than 5 percent. The drop among young adults is striking because they have long been the main audience for the gaming industry. Economic pressures are a major factor. Many Gen Z members face low-paying jobs, rising rent and living costs, and resumed student loan payments. Credit card debt and general inflation are also limiting their discretionary spending. Meanwhile, AAA games now often cost $70 to $80, and new consoles like the Switch 2 are expensive.
Despite spending less, Gen Z is still playing more than older gamers. Many are turning to free or inexpensive games that allow social play. Titles like Peak, Repo, and Lethal Company are affordable, often under $10, and are designed for casual, cooperative fun. They also do not require high-end hardware, making them more accessible.
The way young people engage with games is changing. Circana reports that 63 percent of U.S. gamers buy two or fewer games per year. Free-to-play titles and subscription services like Xbox Game Pass allow players to access many games without making expensive one-time purchases. Platforms such as Roblox and Minecraft provide long-term, evolving digital spaces where players spend time and money inside the game rather than on new titles.
Another factor is the growing backlog of existing games. Many young gamers return to older favorites instead of buying new releases. High-profile premium games like Concord have struggled because they charge for entry into a space where free alternatives already exist. Even free-to-play games like Marvel Rivals see most players eventually return to their established gaming worlds.
Older gamers are in a different position. They generally have higher, more stable incomes, fewer financial pressures, and settled student loans. This allows them to continue buying full-priced games and hardware. Their spending helped total U.S. gaming revenue grow by 22 percent in June 2025, even as Gen Z spending declined.
The takeaway for the industry is clear. Young players have not stopped gaming. They play more hours and try more games than older generations, but spend smaller amounts on ongoing experiences rather than buying expensive new titles. Developers who offer subscriptions, microtransactions, and content that keeps players engaged have the best chance to retain Gen Z. Those who rely on one-time high-priced purchases risk losing the generation that was once the main driver of gaming growth.
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