Video games have been around for quite some time (think the 50s and 60s), but with the rise of mobile gaming, cutting-edge consoles, and multiplayer online worlds, they’ve become more widespread than ever. In fact, 2023 studies show that there are roughly 3.09 billion active video gamers worldwide—a 32% increase in just 7 years.

And as games have become more complex and robust, video game companies have added many new ways to capture gamers’ attention and money using custom skins, unlockable features, and “pay-to-win” schemes that give outsized advantages to anyone willing to shell out big bucks.

But, for those that are willing to pay a premium to access different features, this could mean spending hundreds or even thousands of dollars each month — which ultimately begs the question: is this putting them in a bad financial position? 

Before we jump to any conclusions, let's take a look at the data.

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Studies show the average adult gamer spends about $58,000 on gaming over their lifetime.

That’s according to a survey of over 1,000 American Gamers from All Home Connections, an authorized AT&T reseller.

Their study found that the average gamer spends about $76 per month on gaming, which equates to around $58,000 over their lifetime, assuming they start paying for their own gaming costs at the age of 16.

Now, for most, $76 per month isn’t going to make or break their budget. That said, like everything else in life, you have to consider the tradeoffs. Fortunately for us, All Home Connections did just that. To help quantify their findings, they illustrated how much money gamers could have saved for retirement if they hadn’t spent all that cash on video games. 

Here’s how much each generation (based on their average gaming spend) could have saved by the age of 65, assuming a 6% annual return:

• Boomers: $185,000
• Gen X: $221,000
• Millennials: $307,000
• Gen Z: $285,000

So should gamers cut back their spending and invest the savings for retirement? 

Well, the reality is not so simple.

That’s because, while that monthly spending can add up to serious money in retirement, that doesn’t necessarily mean it’s a bad purchase. At the end of the day, money is just a tool we can use to purchase things we want in life. And for some people, spending $70 to 80 per month on gaming perfectly aligns with how they want to use their money.

So while gamers may be spending a sizable amount over their lifetimes, as long as they’re still reaching their financial goals, there’s no real issue with spending money on games.

That said, there is an issue when the amount your spending on games starts to impact your ability to reach your financial goals, but more on that to come. First, let’s examine which generation is leading the pack in terms of video game spending.

No surprise: Millennials are spending the most on video games.

In the survey, they found that millennials spend about 13% more per month than the average gamer, which is roughly equivalent to $66,000 over their lifetime. 

Intuitively this makes sense as many millennials (like myself) grew up playing video games and are now in a stage of life where they can afford to spend more of their income on games and other accessories. 

As a millennial, I grew up playing games like Age of Empires on the computer, 007 Goldeneye on Nintendo 64, and Gauntlet Dark Legacy on the Gamecube. I loved to play, and I was fortunate enough that my parents could afford to purchase games and were willing to let me play. Fast forward a few decades, and I can now buy my own games and game consoles as I please. 

But everybody is different, and I’ve never been interested in custom skins or in-game purchases to help give me an advantage or custom appearance. That’s not to say I don’t see the appeal; I’m just not drawn to that. This has helped me keep my gaming costs within a reasonable boundary for my budget and avoid impacting my other financial goals.

Still, I decided to get an Xbox, a couple of controllers, and an Xbox game pass last year, and altogether I spent around $600 — or roughly $50 per month if you calculate it across an entire year. In addition, I’ve bought a couple of games since then that probably total another $120. All in all, it’s not cheap, but I enjoy it, and it works for my budget. 

And I think that’s really the key: you have to spend a reasonable amount for your budget and be willing to set some limits, especially if you’re prone to overspending on games.  

But that’s not always as easy as it sounds. For example, if you decided to buy a PS5, a couple of controllers, and a few games this year, you could easily blow past the average annual spending of around $840 per year. But of course, as long as you aren’t upgrading or buying new consoles every year, you should be able to reign in your spending in subsequent years.

Are you overspending on video games? Don’t panic, but it may be time to make some adjustments.

It can be all too easy to get caught up in spending on a video game when trying to level up and deck out your virtual characters. This isn't only motivated by the ego — there is also a certain pressure from society and gaming culture that encourages us to invest more money into a game than we may actually have access to. Marrying the desire of wanting to fit in with friends or peers while also striving for success within the game creates a perfect storm for blowing budgets and overspending.

And it's no secret that video games offer many opportunities for overspending with in-game purchases and custom skins. For some, these purchases are a way to show off their unique gaming style, but for others, it can lead to an unhealthy level of spending. Moderate spending might include purchasing a few extra virtual items, such as weapons or armor upgrades, while more outrageous spending could include shelling out thousands of dollars on new consoles, rare skins, or exclusive characters. Without the right plan, people can easily get carried away with their video game spending habits.

For some gamers, spending money on in-game purchases can become an addiction, causing them to spend money they don’t have using credit cards and other means. That seemed to be the case for gamer Vince P., who spent close to $16,000 in just over a year playing the Facebook game Battle Pirates, according to Wired.  And for others, like Lee, a single 42-year-old businessman from California making over six figures — spending thousands per month playing Clash of Clans is well within his annual budget. 

If you’ve found that you’re overspending on video games to the tune of hundreds or thousands per month, it may be time to make some adjustments. 

Here are some strategies to consider:

First, consider setting some rules for yourself. 

Generally, many people who struggle with overspending like to adopt a 72-hour rule, where if they want to buy something, they wait 72 hours before making the purchase. Often, after 72 hours, the desire to buy has faded, and you can move on without spending any money. But, sometimes, you’ll still want something after 72 hours, which may be a good indicator that this purchase is worth considering.

Next, consider optimizing your environment. 

Often, the thing that stands between us and financial success is not a lack of financial education—many of us know what we should be doing with money — what stands in the way is a poorly designed environment. For example, if you have one-click purchases set up on your gaming console, you’ve streamlined the purchase process and reduced friction to nearly zero. This makes buying a breeze. Alternatively, if you have to enter your credit card information every time you make a new purchase, that additional friction could help you save hundreds of dollars in gaming purchases.

In addition, if you’re currently subscribed to marketing emails and promotional offers from several gaming companies, you’re creating an environment where you are constantly sent targeted ads and promotions to encourage you to buy. But, by simply unsubscribing from marketing and promotional emails, you can reduce the number of ads you see and subsequently reduce the number of purchases you make.

Lastly, consider keeping track of how much you spend each month on video games and set a limit if necessary. 

Managing your video game budget is an essential part of being a responsible gamer. Keeping track of how much you're spending each month can help prevent overspending and help you plan and make sure you have enough money to purchase all the games you want. It's also worth setting a limit for yourself so that video games don't eat away at your income and leave you in financial trouble; for example, set aside a certain amount each month for gaming and stay within it. Doing this will help ensure you enjoy loads of fantastic games without needing to break the bank.

These can be simple but effective ways to alter your environment and get out of a cycle of overspending.

So what’s the best way to stay within your budget?

Often, the key to staying within your budget is to actually design a budget that allocates money to things you need, like food, clothing, and housing, AND things you want, like games, entertainment, and eating out. 

On the one hand, it can be tempting to create a very barebones and restrictive budget to allocate as much of your money to savings and investing as possible, but that can be shortsighted. Typically, the more restrictive budgets are unsustainable and will ultimately result in a pendulum swing towards freer and unrestricted spending eventually. 

So as you sit down to pencil out your budget, don’t be afraid to put some money towards the things you enjoy, even if it means saving a little less. This will help you enjoy your budget and increase your odds of success. In addition, take some time to think about the areas of your budget that you don’t care about as much, whether that’s driving a fancy car or wearing expensive clothes, and consider cutting back in those areas. This way, you can maximize your spending in the places that bring you the most joy and cut back mercilessly on the areas that don’t.

This is often referred to as values-based budgeting — a concept that encourages you to spend more in the areas you enjoy and cut back in the areas you don’t. This can be a simple but effective tactic to help you maximize the enjoyment you get from your money.

In conclusion, while the average gamer isn’t going to upend their financial plan by spending $70 to $80 on gaming per month, some adult gamers could be taking their spending to extreme levels, jeopardizing their ability to secure a healthy future retirement. 

But, if you’re struggling with overspending, there are ways to change. Gamers should consider the effects of altering their environment to make spending just a little more difficult. In addition, while everyone can benefit from a values-based budget, gamers who are struggling with overspending will find extra value in this approach as it will help them maximize spending on things they enjoy while cutting back mercilessly on the things they don’t care about. Because, in the end, spending money is just a series of trade-offs. And like personal finance guru Paula Pant from Afford Anything says: “When it comes to money, we can have anything we want, but we can’t have everything we want.”

The key is to identify what’s important to us and allocate our funds accordingly while still ensuring we’re on track to reach all of our financial goals and more.

If you're looking for further advice to reach your financial goals, consider using our tool to search for a trusted financial advisor who can help you build a budget that works while maximizing the enjoyment you get from your money.

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