When GamesIndustry.biz reports on Circana, it’s usually the tracking firm’s reports on US consumer spending in the past month. But when we speak with Circana analyst Mat Piscatella, our first question is about what he sees happening in the months to come.

“Right now my most optimistic outlook is down about 2%,” Piscatella says. “If you start looking a little bit on the more pessimistic side, you’re looking at down about 10%. If things really go sideways, you’re looking at a little bit more.

“There’s so much uncertainty when you look at the sales data or look to project this year. There’s uncertainty around the hardware. There’s uncertainty about the content. Who the hell’s making the games?”

He notes that the two biggest games of the year to date – Helldivers 2 and Palworld – didn’t quite come out of nowhere, but they were “neighbors to nowhere.”

“Helldivers 2 and Palworld have done a lot of heavy lifting early in the year, but we’re up against a comp last year with Hogwarts Legacy, which was a massive hit,” Piscatella says. “So we need another game on top of Helldivers and Palworld to try to comp what Hogwarts was doing last year, and it’s still doing a year later.”

It doesn’t help that there are few obvious blockbusters coming down the pipe. Grand Theft Auto 6 is 2025, the Switch successor was reportedly pushed to next year as well, and Sony doesn’t have any first-party blockbusters for the next year. And Piscatella doesn’t think their absence automatically lends itself to games like Helldivers 2 and Palworld stepping up to play the role of blockbuster.

“The uncertainty level this year is probably the highest I can recall – and I’ve been around since 2005 – with the uncertainty of what’s going to get us to the finish line because we don’t have those big games announced that we know,” Piscatella says. “When people are saying ‘our slate’s going to be light this year,’ that’s not something that usually happens.”

He also wouldn’t count on mid-generation refreshes for the Xbox Series X|S and/or PS5 to save anything.

“Are those happening? I don’t know,” he says. “I’m under a billion NDAs and no one’s told me, so I don’t know.”

Even if Microsoft and Sony do roll out hardware revisions, such offerings don’t tend to have much of a halo effect.

“What they’re best at doing is bridging,” Piscatella says. “It really helps boost the average selling price. You’re not building the install based significantly, you’re just helping the ASPs and your profitability a little bit. It’s a first-party play, a manufacturing play more than it is a consumer boost.

“You’ll get a lot of the very dedicated audience picking up a second one or they’ll upgrade and pass along their older system to family, friends or sell it, but you don’t see huge boosts occur when it comes to the hardware. You’re basically stabilizing a little bit as you enter the later cycle and those normal declines you would have seen.”

As rough as it might be in general, 2024 might be particularly rough for gaming retail. The shift from physical to digital media continues, but another year without a Switch successor could be particularly painful to brick-and-mortar businesses.

“Retail’s had to get really clever, and on the physical side of the business it continues to decline,” Piscatella says. “With no new Nintendo hardware this year, it’s going to accelerate because Nintendo is right at the 50-50 cusp when it comes to physical/digital, but everyone else is way digital. So retail still relies on Nintendo much more than they do other platforms.”

It’s not entirely all doom and gloom for physical retailers, though. He adds that gift cards for games like Fortnite and Roblox showed significant growth over the holidays, and are a way for retailers to participate in the success of digital games.

As the industry has evolved away from boxed products over the past 15 years or so, tracking methods have had to evolve with it. And where the monthly best-selling titles chart used to be a sort of end-all, be-all about what was doing well in the industry, that’s changed.

The industry digital sales have never been tracked as thoroughly as those of the physical side, and even now Circana’s numbers have some blindspots. For example, they lack Nintendo’s digital sales, as well as sales for games like Palworld and others whose publishers aren’t part of Circana’s reporting panel.

“I feel worse than anybody that we have that limitation, but the trade-off is that the data reported is real, digital [point of sale],” Piscatella says. “We’ve been debating this since 2012. Is it better to have a list with just real numbers, or is it better to have a list with real and extrapolated numbers? And we keep leaning back to the real.”

Rather than settle for having blind spots, Circana has been trying to get relevant insights in slightly more round-about ways. For example, it has been tracking engagement data since 2020 through a representative panel of thousands of players on Steam, Xbox, and PlayStation. Piscatella explains that they use each platform’s friend list features to check in on what their panelists are playing every five minutes or so and stitch the results together for a broader understanding of who’s playing what.

But to Piscatella’s slight dismay, a lot of the public focus around Circana remains fixated on its usual Top 20 best-sellers list.

“If engagement means dollars, that’s the list,” Piscatella says. “And the best-selling titles list is good supplementary info to the engagement list, but it’s been a hard process to get people thinking that way in my conversations with the public.”

Circana is a massive firm that tracks everything it can across a slew of industries, including automobiles, pet care, footwear, and groceries. But Circana says some of the things it does to shed light on the games industry are unique to video games. Part of that is due to the unique business models games use to drive the business, but its penchant for secrecy doesn’t help much.

“Folks think they have secret sauce, and they don’t want anyone else to know the secret sauce,” Piscatella say. “I want people who are interested to be able to have at least some idea of what’s going on when it comes to the numbers, but some of the stuff is super hard to get to and figure out. It’s certainly not easy.

He adds, “You know movie slates. You know music slates. You know other entertainment things. We know the TV development schedule for Marvel going out forever, but we don’t know what games are coming out next month.”

Even without the industry sharing everything it has in store for us, Piscatella has faith that it will be good enough to grow sales. Eventually.

“This is going to be a tough year, but if you look towards 2025, if interest rates come down and money becomes a little bit more free-flowing to devs and pubs, we should get a boost in the development cycle again,” he says. “We’re going to get a renewed batch of interest with GTA 6 in particular. There’s probably never been a more important thing to ever release in the industry, so no pressure.

“It’s been a very strange five years in this market, just from the big boom to the hardware shortages to the topping out of engagement, but it’s kind of a thing where we’ve regressed to the long-term trend and now we should be starting to get toward [following] that trend again as we go to 2025.

“I think it’s short-term pain. Hopefully I’m not wrong. But it’s going to be a little bit painful for this year.”