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The global gaming console market grew 10 per cent (year-over-year) last year, primarily due to improvements in the supply chain constraints faced in 2022, rising consumer demand, and new releases, a new report said on Wednesday.

According to Counterpoint Research, a pick-up in growth was observed after the launch of new-generation consoles.

Sony surpassed Nintendo to become the top player in 2023, owing to the PS5’s popularity.

"The latest generation of consoles, launched by Sony and Microsoft in 2020, drove the market up in 2021. Further, the Covid-19 pandemic supplemented the market’s growth because of the time people were forced to spend at home," the analysts said.

"2022 witnessed supply chain constraints, which weakened in 2023, resulting in a market rebound," they added.

According to the report, Sony is expected to lead the market again in 2024, driven by its popularity and weak competition.

As per estimates, the report mentioned that software and other services revenue includes the bulk of gaming console market revenues and is expected to increase further in the coming years.

In 2023, software and other services revenue accounted for over 70 per cent of the entire gaming revenue for Sony and Microsoft. The analysts said that they expect a single-digit decline in the gaming console market in 2024.

Artificial intelligence (AI) integration is going to be an integral step for the gaming industry’s future growth.

"Microsoft has already started working on an AI chatbox for Xbox, initially to help with support queries. Sony is also expected to enhance its upcoming PS5 Pro and PS6 devices with AI," the report stated.

AI upscaling is expected to improve the quality of the content in the PS5 Pro, it added.