Video Games Are Losing "Attention War" to Gambling, Porn, and Social Media, New Report Finds

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The video game industry is facing a slow but steady decline in player participation across its most important markets, and a new report explains where all that attention is going.

Gaming industry analyst and venture capitalist Matthew Ball has published his annual "State of Video Gaming in 2026" report, a sprawling 164-page breakdown of where the industry stands today. The findings are not exactly cheerful for anyone who loves traditional gaming.

Across 8 major markets, including the USA, Japan, South Korea, the UK, Germany, France, Canada, and Italy, which together account for over 60% of global video game spending, player participation has dropped noticeably since the pandemic peak.

In the US alone, somewhere between 2.5 and 4% points worth of players have simply stopped playing. Canada tells an even starker story, with roughly one in six players from the pre-pandemic era no longer active.

So where did those players go? According to Ball's report, they did not disappear. They just found other things to do with their time and money.

TikTok consumption in the US is up 39 million hours per day compared to pre-COVID figures. Total social media usage across the country has crossed 500 million average hours per day, with YouTube climbing the fastest.

Annual spending on OnlyFans in the US alone has reached nearly 5 billion dollars.

Online sports betting losses hit 17 billion dollars in the US in 2025, a staggering 35 times increase from 2019 as the practice has become more normalized and legalized. Globally, those losses sit at around 53 billion dollars.

On top of that, AI apps focused on roleplay and creative content have seen nearly one billion installs worldwide in just the latest tracked period.

The combined growth of OnlyFans, sports betting, and internet casinos went from 1.2 billion dollars in 2019 to 32.8 billion dollars in 2025. Gaming, by comparison, grew from 38.8 billion to 51.8 billion over the same period. The raw numbers for gaming still look bigger, but the momentum has clearly shifted elsewhere.

As a result, the traditional AAA model is struggling. Spending on PC and console in the Major Market 8 has shrunk by 4.8 billion dollars, and mobile is down by 2.3 billion. Outside investment in gaming has been retreating, and major companies like Sony have responded by raising prices on their most loyal customers.

Microsoft has pivoted hard toward a publisher model, and subscription services like Xbox Game Pass, PlayStation Plus, EA Play, and Ubisoft Plus have become survival strategies rather than optional extras.

The report does acknowledge a few bright spots. Gaming in China is growing, and Roblox continues to expand aggressively. In fact, according to Ball's findings, Roblox makes up 67% of net growth in the space right now. Whether that is genuinely encouraging depends on what kind of gaming you care about. For those hoping for more experiences in the vein of Elden Ring, Roblox dominating the growth charts is cold comfort.

The bigger takeaway from Ball's report is that gaming is no longer fighting only other games for attention. It is competing with pornography, gambling, short-form video, AI companions, and crypto speculation, all of which are tuned to be deeply engaging and increasingly easy to access.

That is a very different battle than the one the industry was fighting ten years ago, and right now, it is not entirely clear that games are winning it.