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.