The NPD figures can be read in two ways, and neither is good for the industry. The first is that as gamers move to smartphones they pay less for games. It is a sort of “creative destruction” as one business model gives way to another. In the meantime, revenue across the entire industry falls, which means from a sales standpoint it is a secular retreat.
The more ominous theory about the drop in game sales is that consumers felt pinched during the holidays — more than some retail figures indicated. However, when the government released December retail sales, the information showed an increase of only 0.1% to $400.6 billion. Consumer spending shows that the caution that marked the early part of the year never really disappeared.
A game console costs about $250. A game retails for $50 or so. These prices are within the reach of many American consumers. A game console is a gift that keeps on giving, game after video game. Yet, fewer people were giving them, by far, than they were a year ago.
Douglas A. McIntyre
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