Blog — April 22, 2026
Video game profitability tracker: Positive, if precarious, margin trends in 2025
By Neil Barbour
Many of the top publishers were able to make the most of their portfolios in 2025 while keeping costs stable, producing a precarious margin expansion after three years of downward trends.
We expect publishers and developers will continue to cut head count and otherwise exercise production discipline to hang on to current profitability levels.
However, there will be little room for error. Put simply, the hits must hit. We're looking at you, Grand Theft Auto 6.
A healthy bump in revenue and an ongoing push toward staffing austerity netted the video games industry just more than half a point of EBITDA margin growth to 18.5% in 2025, but that key profitability metric was still below the 20% level common in the pre-pandemic years.
Many of the top publishers were able to make the most of their portfolios in 2025 while keeping costs stable, producing a precarious margin expansion after three years of downward trends.
We expect publishers and developers will continue to cut head count and otherwise exercise production discipline to hang on to current profitability levels, but there will be little room for error. Put simply, the hits must hit. We're looking at you, Grand Theft Auto 6.
Another factor to keep in mind is that the industry's profitability tends to swing higher as the console generation ages, evident in the improving margins at Sony Group Corp. and Microsoft Corp. as their respective hardware options enter the back half of their shelf lives. (Note that the pandemic bucked this trend as the impact of new consoles was offset by growing revenue borne of pandemic-driven demand.)
The trend lines may look a little different as we enter the next console generation later this decade as it appears Microsoft is moving away from the traditional console business. Sony will have an opportunity to take a big chunk of market share, but it would likely have to continue to subsidize consumer-ready hardware to do so.
S&P Global Market Intelligence Kagan's video game profitability analysis includes reported revenue and calculated EBITDA for 68 companies in the entertainment software industry. Our report also includes reported OIBDA for Sony's games and network services business, estimated OIBDA for Microsoft's gaming division and historical revenue and EBITDA from Activision Blizzard Inc. prior to its acquisition by Microsoft.
CapIQ Pro subscribers can read more about the underlying dynamics driving company-level EBITDA performance.