Lost In The K-Hole
Sam Lessin, in his weekly newsletter, referencing his own X post:
K-shaped inflation in New York Hotels .. I am trying to push this concept into the public consciousness so go with me… every time inflation numbers come out on the cost of mass market bread and TVs I laugh, as I sip on a \$12 late or eat \$42 sushi roll at the US Open. This week I stayed in NYC and a decent hotel cost \$3500 a night (just decent) because of fashion week, etc. also lack of supply, also the fact that at the high-end of the K the market can and will bear insane inflation. One person this week was joking about the \$10K a square foot soon-to-be reality post AI IPOs in SF. The point is this — the economy is splitting— the rich ARE getting richer, but the bubble services and product they buy are having no problem keeping pace… we have K-shaped economy which doesn't just mean K-shaped income, it means K-shaped costs.
This K-shaped fracturing feels familiar in games.
From the Newzoo Global Games Market Report 2026:
The global games market is growing. It is forecast to reach \$213.9 billion in 2026, up 6.1% year over year, with growth across all three platforms and every major region.[...]
The player base is forecast to reach 3.70 billion (+4.4% YoY), and spenders to reach 1.65 billion (+4.7% YoY), with a 44.6% conversion rate.
Great news, growth! But here comes the K-Hole, from Matthew Ball's The State of Video Gaming in 2026:
But despite three straight years of industry growth, a new record high for revenues, and a smattering of new hits each year, private funding for gamemakers fell another 55% in 2025[...]
The top PC/Console franchises (each 9–33 years old) hold a stable 45% of all player hours. And where share has been lost, it's mostly to other 5 –25-year-old hits
[...]
Mobile spend is five years flat and new releases are at a decade low share of spend and downloads as old giants strengthen and UA costs crowd out discovery
[...]
China : 20% of global player spend, but now 38% of growth (v. 15% in 2019)...84% of its player spend goes to Chinese-made games.
[...]
Roblox is 60% of Spend Growth Outside China Since 2021
The Chinese industry and incumbent franchises are the high-end of the K here.
The jobs tell a similar story. Amir Satvat reports that global games employment has barely changed since 2022, even as North America accounts for more than two-thirds of the layoffs he tracks.
The growth is real. So is the pain. The industry average tells you very little about who is experiencing which.
Inside Roblox, spending and engagement are heavily concentrated too. The 2026 Roblox Benchmark Report, based on more than 500 titles with at least one million monthly active users, found that only 3.8% of tracked players paid anything during the study period. Among those who did, median spend was $0.81. At the 99th percentile, it was $86.36. The median player logged three sessions a day; at the 99th percentile, that reached 42.
GTA VI could become the fastest-selling entertainment release in history this November. And if it does, expect another round of "games are back" headlines.
A record for Rockstar can look like a recovery for everyone. But look beneath the headline and there's the K-Hole.