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Gaming content down even if you include App Store casual gaming

The gaming industry has tended to be cyclical for as long as we can remember – not that it mirrors recessions, but somehow gaming comes and goes in th


Published: 20 January, 2011


The gaming industry has tended to be cyclical for as long as we can remember – not that it mirrors recessions, but somehow gaming comes and goes in the minds of its major users as they grow or as new ideas take root.

We’ve always assumed someone understood this, someone perhaps at Sony or Microsoft or Nintendo, but no-one has ever given us an explanation that seemed to fit. The explanation is to do with shifting from one age group and from one platform to the next, and when the PC was a stronger platform, the shift to games consoles in the mid-90s, was a massive uplift in revenue for the gaming industry, around the time of the original PlayStation launch. Before that prior industry consoles had produced the same effect, and then PC gaming had crashed its pricing a created havoc.

The gaming community has spent two decades trying to prevent this cyclicality and drive either innovation or pricing changes or fresh content availability at the market, at the right moment, in order to present an evenly changing gaming world, which is predictive in revenues.

But it’s no surprise to us if this cycle is happening all over again, and research group NPD hints that it might be, with figures out that say that 2010 had about a 1% fall in gaming content revenue in the US from 2009. But in order to come up with this statistic which sound like the games industry is in mild decline, it has had to round up every new form of gaming content revenue, suggesting that the sweet spot in gaming is moving once again.

NPD says that the games content market changed dramatically in 2010 with a far wider set of options available including physical product, digital downloads and in-store kiosks and even admits that only by taken this increasing number of ways into account has it allowed the content industry to maintain total consumer spend compared to 2009. It says it expects to see 2011 as a growth year. We’re not so sure.

Well when you have to grab more data from more sources in order to show a minor loss, it looks like you are massaging figures. What would the comparison be if you compared like with like from 2009 to 2010? And remember in 2008 gaming revenues collapsed from a total of $21.4 billion in the US to $19.66 in 2009 which is the year we are comparing it with, a fall of almost $800 million. Now NPD is talking about gaming reaching maybe $15.6 billion in 2010, but clearly defines it very differently this time around, as total consumer spend on gaming content, including new physical video and PC games, used games, game rentals, subscriptions, digital full-game downloads, social network games, downloadable content, and mobile game apps. It conspicuously misses out gaming hardware in that total, which NPD will release in another month or so, but the impression you get is that it’s going to be another down year for US games unless hardware pulls us through. The worrying thing is that NPD usually produces its full gaming revenue report before the end of January, but this year it will be out in early March.

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