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

An analysis forecasts a decline in the East Asia video game market by 2025 due to global challenges impacting Japan and South Korea.

According to a study released on July 29 by Niko Partners, the video game markets in Japan and South Korea are expected to shrink by 2.3% in 2025. The firm, which has been studying these markets for eight years, highlights several contributing factors.

The firm’s East Asia Market Model and Five-Year Forecast indicates that the region’s game revenue, which was $29.1 billion in 2024—a 3.1% drop from the previous year—will slightly decrease to $28.5 billion in 2025.

This downturn is attributed to weakened currencies relative to the US dollar and an economic slowdown due to persistent global trade challenges.

Nonetheless, the forecast suggests recovery in 2026, with revenues climbing to $30.3 billion by 2029, reflecting a 0.8% annual growth rate over five years.

Japan is expected to have an average revenue per user (ARPU) of $21.82, whereas South Korea is forecasted to achieve an ARPU of $30.77, the highest among the Asian markets analyzed by Niko Partners.

The report also anticipates a 1.3% increase in the number of gamers in East Asia in 2025, reaching 98.5 million, and project a rise to 101.7 million gamers by 2029, with a 0.9% annual growth rate over five years.

Beyond revenue predictions, the report sheds light on gamer demographics within East Asia.

Niko Partners discovered that 46.6% of Japanese gamers and 37.8% of South Korean gamers engage with gaming video or livestreams.

Furthermore, a prevailing trend is the popularity of RPGs for both PC and mobile, with Korean gamers favoring multiplayer RPGs and Japanese gamers leaning towards single-player RPGs.