Research firm NPD reported that video game sales fell 29% in June to $699.8 million. Hardware sales dropped 45% year-over-year. This was despite the release of the new Nintendo 3DS. “The 3DS is still up nearly 25 percent over where the Nintendo DS was in a similar point in time after release to market, and has topped portable hardware sales for the last 11 months,” Anita Frazier, an NPD analyst, wrote in the report about June.
The problem is that June 2011 was a period in which a lot of new games first came to market. Furthermore, the single greatest challenge to console and game sales is the migration of gaming to smartphones, which have become de facto handheld game devices. Many of the games for these are free or very inexpensive. The challenge is one that the Microsoft (NASDAQ: MSFT) Xbox, Sony (NYSE: SNE) PS3 and Nintendo cannot easily fight off. Smartphone games are easy to download, and the overall use of smartphones for most daily tasks has soared.
Douglas A. McIntyre