Bad news for the video game industry, including the nation’s third-largest development hub which is right here in the Triangle.
U.S. retail sales of new video games dropped in 2010.
Only revenue from mobile game “apps” and other new formats helped keep the total amount spent on video game content unchanged from a year ago, according to market researchers NPD Group Inc.
Epic Games in Cary was one reason for the break-even revenue.
It’s “Infinity Blade” mobile game for the Apple iPad and Apple operating system – the company’s first venture into that OS realm – produced record sales.
Plus, looking ahead to this year, Epic is rolling out “BulletStorm” for conventional game platforms next month.
Plus, December was a good month for the industry, perhaps indicating a rebound.
“December 2010 represented one of the strongest monthly performances the industry has ever had at retail. It was a robust finish to a year marked by innovation and engaging millions of consumers through a multitude of delivery models,” said Michael Gallagher, president and CEO of the Entertainment Software Association, a trade group representing the videogame industry.
“Computer and video games led all other entertainment options as we responded to consumers’ demands for creative content on every platform from consoles to smart phones to handheld game devices,” he added.
However, for most of the industry, 2010 couldn’t end fast enough.
NPD said Thursday that sales of video games made for consoles, portable gaming devices and personal computers dropped 5 percent to $10.1 billion.
Increased sales of used games, digital downloads, games for smart phones and games played over social networks kept video game content sales at $15.4 billion to $15.6 billion for 2010 — about flat with 2009.
The numbers underscore the growing role of mobile devices and social networks such as Facebook.
“The dynamics of games content purchasing changed dramatically in 2010 with options ranging from the physical product to digital downloads on connected devices as well as in-store digital kiosks,” said Anita Frazier, an industry analyst with NPD Group. “The increasing number of ways to acquire the content has allowed the industry to maintain total consumer spend on content as compared to 2009, and we should expect 2011 to be a growth year in the games industry as the consumer demand for gaming continues to evolve.”
Video game console sales slipped 13 percent to $6.3 billion in the U.S. in 2010, NPD said. Microsoft Corp.’s Xbox 360 was the only console to sell more units than it did in 2009.
In December, traditionally the biggest month for video game sales, console sales declined 9 percent to $5.1 billion. Total sales of video game software at retail, which includes PC games, slipped 5 percent to $2.5 billion during the month, compared with the same month in 2009.
The best-selling hardware system in December was the Nintendo DS, a handheld gaming system. Reggie Fils-Aime, the president of Nintendo’s of America, called the holiday shopping season “exceptional” for the company.
David Dennis, a Microsoft spokesman, said the company couldn’t keep up with demand for Xbox 360 consoles in December, but despite shortfalls Xbox had its biggest month to date, with 1.9 million units sold.
Video game accessory sales rose 10 percent to $778.4 million in December, led by sales of Microsoft’s $150 Kinect motion-sensing controller. Microsoft would not say how many consoles were bought together with Kinect in December, but has said it sold 8 million Kinect units in November and December.
The top-selling game in December was “Call of Duty: Black Ops,” the shooter from Activision Blizzard Inc., which has versions for all the consoles and for the PC. The game broke entertainment records after its November launch, bringing in $1 billion in worldwide revenue in its first six weeks in stores.
“Just Dance 2” from Ubisoft Entertainment for Nintendo’s Wii and “World of Warcraft: Cataclysm” from Activision Blizzard for the PC were the second and third biggest selling games in December.
For all of 2010, “Black Ops” was the top-selling video game. The No. 2 game was “Madden NFL 11” from Electronic Arts Inc., followed by “Halo: Reach” from Microsoft for the Xbox 360.
Read the full NPD Group report here.
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