Emerging markets shaping US games sector

NPD figures show that the North American video game market declined by 31 per cent in June – the biggest year-on-year decline since the 41 per cent drop suffered in September 2000.



But the falls appear to fly in the face of estimates which state that 4m new gamers have entered the market since the beginning of the year.

So why the decline? NPD reckons that the rise of digital downloads and free-to-play online games is now taking sizable chunks out of the traditional retail model.

“Our latest gamer segmentation study suggests that more than 4m new ‘players’ have entered the games market since last year, so certainly the decline isn’t due to less folks participating in the industry,” NPD’s Anita Frazier explained.

“Some of these are new retail consumers and some are playing online for free, and others are a mix of both. The trick is to continue to figure out how to monetize all the gaming that is going on across PC, mobile devices, and video game systems.

"Certainly there is plenty of opportunity in the industry, but the rate of change in many areas of the industry presents a lot of challenge as well.”

Microsoft adds that its own digital sales on Xbox Live are up significantly, with Alan Greenburg telling Gamasutra:

“I think what’s interesting there is we were the first to market, so in many ways we’re showing a lot of longevity. Xbox Live data is kind of this untold phenomenon. There are 20 million people there, but what are they doing? Are they buying more stuff?

“In the first half of the year, paid downloads increased 73 percent over the 12 months through June. That significantly outpaces what we saw in growth for console sales or software sales. It’s continuing to become a bigger and bigger part of our business.”

NPD also notes that sales of subscription and points cards, used for accessing subscription-based MMOs and buying points for services such as Xbox Live and Virtual Console, were up by 67 per cent year-on-year.



“There are increasing avenues for consumers to game, including via mobile devices, and it’s clear the industry is sorting through how to manage all these opportunities while deploying resources appropriately.”