The console gaming market has plateaued. PC gaming is bigger than ever but not exploding. To the extent that video games are still growing, it’s thanks to players in China and Roblox. And as user-generated content and casino apps thrive on mobile, the traditional AAA blockbuster model is finding it harder than ever to compete with the rise of OnlyFans, Draft Kings, and TikTok.
Those are some of the main themes in venture capitalist and analyst Matthew Ball’s annual report on the state of the video game industry. His 2026 mega slideshow is full of graphs painting a picture of where gaming’s been and where it’s headed. It’s a fascinating and occasionally grim portrait of a stalled industry struggling to compete with everything else consumers could do in their free time.
Matthew Ball
Increasingly, especially among young men, those distractions include looking at porn, betting on sports games, playing in live casinos, and endlessly scrolling videos on YouTube and TikTok. Ball argues that while interactive entertainment is still “ascendant,” that doesn’t just mean video games any more. The rise of content creator economies and legal online gambling means some of the oldest forms of interactive entertainment are now more accessible than ever.
The average daily hours of TikTok watched in the U.S. are still over 100 million. Total social media usage has surpassed 500 million average hours a day, with YouTube rising the fastest. Annual spending on OnlyFans in the U.S. alone is up to nearly $5 billion. Crypto hasn’t gone away and meme coin trading is still surging. AI app installs hit nearly 1 billion last quarter. Betting on prediction market platforms like Kalshi and Polymarket has skyrocketed in recent months.
Matthew Ball
The figures go on. Online sports betting losses hit $17 billion in in the U.S. in 2025 and $53 billion globally. Interactive online casinos are spreading as players continue to pour money into mobile slot machine games. Gaming spending in the U.S. increased by $12.9 billion in the past six years, going from $38.8 billion in 2019 to $51.8 billion in 2025. But during that same time, spending on OnlyFans, sports betting, and internet casinos increased from $1.2 billion to 32.8 billion, a total increase that far outstrips gaming’s recent growth.
“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,” Ball writes. “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.”
Matthew Ball
He points out that most of this activity is concentrated around the same groups of people, and in particular the types of people who used to be the target demographic for AAA game spending. Add it altogether and you have, in Ball’s analyses, a recipe for a calcifying market where games are losing out to new entrants in the attention economy as people try fewer new games and spend more of their time in existing free-to-play ones. Outside investment has been fleeing as a result and major players like Sony and Fortnite get by through raising prices on their most loyal fans.
To the extent that there are green shoots in the industry, Ball points to major growth in China and Roblox. One of those is a potential boon to game studios trying to find new audiences rather than fight competitors for scraps of existing ones. The other is a closed-off social platform and creator economy that serves no one beyond its owners and the people who try to sell games there.
Investors might find both silver linings equally appealing, but for people who want more games like Elden Ring than Grow a Garden, Roblox being where all the action is will only add to the sense of lowkey ambient panic.
