Last week we had the USA October sales statistics from NPD showing game sales of $573 million, down from $698 million last year. So are we in trouble? Is gaming on a downwards spiral? Are people finding better things to do with their time and money?
The answer is no, and here’s why:
- The industry has moved online and away from paper and cardboard massively during the last year. There is a plethora of new MMOs, for instance. Even the game consoles are moving increasingly to downloaded content. And the iPhone has grown from nothing to become a major gaming platform. NPD only measures the high street retail spend.
- Over the last year there has been a massive rise in secondhand game sales. So people are still buying games, but the same physical units are often sold multiple times and only the first time shows up on NPD.
- The game industry turnover at retail revolves around a small number of blockbusters. October this year was very light on these, as is the whole of Q4 this year. A lot of this can be put down to the industry running scared of Modern Warfare 2. People don’t even want to launch in the same quarter as this.
- Music/dance games were largely a fad and that is now over. Sales have more than halved in this sector.
- Another high value sku, Wii Fit, is tapering off in sales compared with the craze that it was last year.
- The games industry has structural and management problems. These will be worked through, but there is no doubt that the industry is not making the most of the opportunities open to it.
So there we have it, the whole industry doesn’t need to go on a burger flipping course just yet.
4 comments ↓
Very interesting post again Bruce. I wish you’d post more often. Correct me if I’m wrong, but I also think that this year wasn’t the biggest one in terms of Pre-Q4 blockbuster. Last year saw GTAIV in April and MGS4 in June, which sold like hot pockets.
2010 should be interesting in that regards as a few important titles (I.E. Heavy Rain) are getting out in Q1. Anyway, numbers are numbers, I wholeheartedly agree with your analysis of them. MW2 pushed a lot of titles back in 2010.
Bruce,
Interested in your thoughts on the link below – annoying to imply that marketing budgets rather than quality of marketing are important….
http://www.gamesindustry.biz/articles/marketing-influences-game-revenue-three-times-more-than-high-scores
@Matthew
Obviously marketing is many times more powerful than product quality. People want to buy into a brand, an image, an idea. Look at how much women pay for little pots of grease to see this in extremis.
Article about this here: http://www.bruceongames.com/2009/08/13/app-store-pricing/
Hi Bruce,
Just to clarify I was referring to the quality of marketing v marketing spend. Apologies if this was unclear
The original link suggested that marketing budget was the most important factor. Personally I’d hate this to be the case as it’s likely to encourage “lazy” marketing – chucking money at advertising etc without thinking about the most effective and appropriate marketing activity….
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