A new industry report by analyst Matthew Ball highlights how video games are struggling to compete for users' time against gambling, pornography, and social media platforms. Spending on gaming has grown modestly in recent years, but alternatives like OnlyFans and online betting have seen explosive increases. The analysis points to shifts in the 'Major Market 8' countries, where participation in gaming has declined post-pandemic.
Matthew Ball, a venture capitalist and gaming industry analyst, released his 2026 report on the state of video games, a 164-page presentation examining trends in the sector. Titled in parts as addressing how "video games are losing the attention war in the 'Major Market 8,'" it covers eight key markets: the USA, Japan, South Korea, UK, Germany, France, Canada, and Italy, which accounted for over 60 percent of global gaming spending before the pandemic.
Post-pandemic, gaming participation has dropped in these regions. In the US, 2.5 to 4 percentage points of players have stopped, according to the Canadian Trade Association's findings of roughly one-in-six players quitting in Canada. This has led to reduced spending: US PC and console expenditures fell 8 percent since 2020-2021, totaling a $2.3 billion decline. Across the Major Market 8, console and PC spending shrank by $4.8 billion, and mobile by $2.3 billion, despite five markets reaching all-time highs in overall consumer spending.
The report attributes this to competition from other interactive entertainments, including social video, creator pornography, AI assistants, crypto and memecoins, prediction markets, online sports betting, and iGaming. US TikTok consumption rose by 39 million hours daily compared to pre-COVID levels. Annual US spending on OnlyFans reached nearly $5 billion in 2025. Online sports betting saw US net losses exceed $17 billion in 2025, a 35-fold increase from 2019, with global figures at $53 billion. iGaming losses worldwide totaled $54 billion annually, representing 45 percent of global gaming spending and twice the growth of mobile casino games.
Ball writes, "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." He adds, "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."
US gaming spending rose from $38.8 billion in 2019 to $51.8 billion in 2025, a $12.9 billion increase. In contrast, spending on OnlyFans, sports betting, and internet casinos jumped from $1.2 billion to $32.8 billion over the same period. Growth in China and Roblox—accounting for 67 percent of net growth—offers some positive signs, though the report notes a shift toward free-to-play models and away from AAA titles. Investment in the industry is declining as companies like Sony and Epic Games (Fortnite) rely on price increases for loyal users.
