Sales drop as gamers look toward free options
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It seems less and less people are getting “in the game.”
Year-to-date sales of video game hardware, software and accessories have dropped 8 percent, according to a September report by the NPD Group, a market research company. The numbers were recorded in a Sept. 9 Wall Street Journal report.
In addition, sales for the month of August — usually a big month for the video game industry when mega-hit Madden NFL Football comes out — were the lowest since 2006 at $1.6 billion, compared to $1.8 billion in August 2009.
James McGibany, a professor of economics at Marquette, said the drop in sales of video games highlights a lack of consumer spending by Americans as a whole.
Video games, generally regarded as a nonessential item by most people, would probably be one of the first items families cut from their budgets when strapped for cash, he said.
“As opposed to groceries, people can get by without video games,” McGibany said.
Kurt Squire, a professor of educational communications and technology at the University of Wisconsin-Madison, is not convinced the bad economy is the sole contributor to the slowdown in game sales, however.
“Historically, games, like most entertainment, have been unaffected by (a slow economy),” Squire said in an e-mail.
Squire suggested free online video games like FarmVille could be hurting the traditional video game stores. Also, 2010 has featured fewer blockbuster games than other years, he said.
Rich Taylor is the senior vice president of communications at the Entertainment Software Association. One of the things the ESA has a keen eye on is the E3 gaming convention, an annual event they own and operate, which shows the hot trends and future direction of the gaming industry.
Taylor said the video game industry has seen small setbacks in recent years, but none that have had major effects on companies.
“Like many other industries, the video game industry was not immune to the effects of the U.S. economic downturn in 2009,” Taylor said in en e-mail.
The industry recorded a record $5.53 billion in sales in December 2009, Taylor said.
Paul Lambert, a junior in the College of Communication, said he has noticed a big drop in the amount of money he has spent on video games in recent years. Lambert said video games have lost their appeal as he has gotten older.
“I just can’t justify spending 60 or 70 bucks on a new video game,” he said. “I’m guessing that is the case with most parents too. Why spend hundreds of dollars so your kid can sit in front of the TV all day?”
While video games may be more popular among youth, the industry is trying to change that. Taylor said this year’s games coming out for the holiday season are geared for people of all ages.
That is perhaps the area where video game companies have the potential to see the most growth in the future. When the Nintendo Wii first came out, for example, part of the advertising spree was geared toward elderly people, with commercials showing old men playing a bowling game on the TV.