Niko Partners forecasts a 2.3% decline in the East Asian video game market in 2025

Forecasts suggest a downturn in the East Asia video game sector by 2025, with Japan and South Korea facing challenges due to global economic conditions.

A recent report from Niko Partners, released on July 29, anticipates a 2.3% reduction in the East Asia gaming market in 2025. This region, which includes Japan and South Korea, has been monitored by the firm for the past eight years.

According to the East Asia Market Model and Five-Year Forecast by Niko Partners, the gaming industry in this area generated $29.1 billion in revenue for 2024, marking a 3.1% decline from the previous year, and is expected to dip further to $28.5 billion in 2025.

The report attributes this decrease to "weakened currencies against the US dollar and economic deceleration amidst ongoing global trade challenges."

Despite this projected decline, the market is expected to recover by 2026, climbing to $30.3 billion by 2029, with a five-year compound annual growth rate (CAGR) of 0.8%.

For 2025, Japan's average revenue per user (ARPU) is estimated to be $21.82, whereas South Korea's ARPU is forecasted at $30.77, the highest among the Asian markets analyzed by Niko Partners.

The report also projects a 1.3% increase in the number of gamers in East Asia, bringing the total to 98.5 million in 2025, with an expected rise to 101.7 million by 2029, sustaining a 5-year CAGR of 0.9%.

Further insights in the report include demographic trends among gamers in East Asia. Notably, 46.6% of gamers in Japan and 37.8% of those in Korea engage with gaming videos or livestreams.

Consistently, one trend remains the same since Niko Partners began monitoring: the popularity of RPG titles on PC and mobile. While Korean gamers favor multiplayer online RPGs, their Japanese counterparts demonstrate a preference for single-player RPGs.