Gen Z Spends Far Less on Video Games Than Older Generations, Study Finds

The glow of gaming screens dims for young adults as economic realities bite. Gen Z gamers (18–24 years old) have slashed weekly video game spending by nearly 25% compared to 2024—the steepest decline of any age group—amid mounting financial strain, according to a new Circana report. This plunge contrasts sharply with older gamers, whose spending dipped by less than 5%. As student loans, job instability, and credit debt converge, the industry faces a demographic rift during what should be a banner year for blockbusters like Elden Ring Nightrein and the Nintendo Switch 2 launch.

Why Are Young Gamers Cutting Back on Video Game Purchases?

Economic turbulence is reshaping Gen Z’s spending habits. According to the Wall Street Journal (August 2025), this cohort faces a “tougher time” securing employment, coupled with resurgent student loan payments and credit-card delinquency rates at pre-pandemic highs. Circana data shows online and retail game purchases for 18–24-year-olds fell 13% year-over-year from January–April 2025. Matt Piscatella, Circana’s Executive Director, emphasized via social graphs that while all age groups reduced spending, Gen Z’s drop was “disproportionate and economically driven.

Ironically, this pullback coexists with costly gaming temptations. Earlier 2025 surveys cited by Circana revealed that “gacha” mechanics (loot-box systems) still lure some young players into overspending—even jeopardizing rent payments. Yet for most, essentials now trump entertainment. Student loan repayments, restarting after a years-long pause, consume budgets previously allocated to new releases or in-game purchases.

How Does Gen Z’s Spending Shift Compare to Older Gamers?

Circana’s demographic breakdown highlights a stark generational divide:

• Gen Z (18–24): 25% weekly spending decrease
• Millennials (25–44): 4–5% decline
• Gen X+ (45+): Under 3% reduction

Piscatella’s visuals illustrate this gap, showing Gen Z’s spending curve plunging while others remain relatively stable. Industry analysts note older gamers benefit from established careers, higher savings, and less debt vulnerability. Meanwhile, Gen Z’s credit delinquency rates—up 30% since 2023, per Federal Reserve data—limit discretionary funds.

Will the Gaming Industry Adapt to Younger Players’ Budgets?

The trend pressures publishers to rethink monetization. Free-to-play models like Fortnite or Genshin Impact may gain traction, but even these rely on microtransactions—a hard sell for cash-strapped youth. Some studios are exploring lower-cost options:

• Subscription bundles (e.g., Xbox Game Pass)
• Longer game lifecycles with fewer $70 releases
• Ad-supported tiers for budget-conscious players

However, Circana warns that persistent inflation could prolong Gen Z’s spending slump. “Gaming is resilient but not recession-proof,” Piscatella noted. “When rent or loans compete with a new game, necessities win.”

Gen Z’s 25% spending retreat signals a seismic shift for gaming—one where economic survival overrides digital escapism. As student debts and uncertain employment reshape priorities, the industry must balance blockbuster ambitions with genuine affordability. For ongoing analysis of gaming economics, subscribe to our real-time reports.

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Must Know

Q: How much has Gen Z reduced video game spending?
A: According to Circana, weekly spending by 18–24-year-olds fell nearly 25% year-over-year in 2025. Retail and online purchases also dropped 13% from January–April.

Q: Why are young gamers spending less?
A: Economic pressures dominate: student loan repayments resumed, credit delinquency rates rose, and youth job markets tightened. The Wall Street Journal (2025) ties this to “unprecedented financial strain.”

Q: Are older gamers also cutting back?
A: Yes, but minimally. Circana data shows Gen X and older players reduced spending by under 5%, buoyed by stable incomes and lower debt exposure.

Q: Could free-to-play games offset this trend?
A: Partially. While models like Fortnite attract budget players, many rely on microtransactions—which Gen Z is also curbing. Subscriptions (e.g., PlayStation Plus) may bridge the gap.

Q: Will this hurt upcoming game releases?
A: Major titles like Clair Obscur: Expedition 33 may see softer Gen Z sales, but broader demand from older demographics could compensate.

Q: Has Gen Z stopped gaming altogether?
A: No. Engagement remains high, but spending is redirected. Circana notes increased play of owned games or lower-cost indies instead of new $70 releases.