2011 was a year defined by some of the better games that this industry has seen in quite some time. Whether this was a result of ever-improving technology, more talented writing and game design, or sheer luck, 2011 left gamers with a lot of victories.
Our own year-end winners (and losers) defined many of the ground-breaking titles that gamers had a pleasure to play. Skyrim gave players a massive world to explore and get lost in. The Old Republic became the fastest growing MMO in the history. Batman: Arkham City redefined the action/adventure genre with its incredible depth and strong story, and lest players forget about Game Rant’s Game of the Year, Portal 2. So many other games deserving of praise, all who had their own part in creating an incredible library for players to choose from.
However, as with any for-profit business, investors are less impressed with technical mastery and strong writing, instead focusing on ROI and flat-out profits. The NDP Group released its figures on physical software sales, and found in December, total industry sales dropped by a whopping 21% to $3.99 billion compared to last December’s $5.07 billion. Hardware sales were down 28% and software dipped by 14%.
The big pictures does indicate that the losses on the physical side were mitigated in some regard by digital content, with total figures down only 2% from 2010, estimated between $16.3 and $16.6 billion for the year.
That being said, physical software sales are still the dominant force in the industry. NPD estimates that spending on new physical content at retail locations (including portable, console and PC game software) generated revenues of $9.3 billion, an 8 percent decline over the $10.1 billion generated in 2010. Consumers were driven more to used games, digital content (including full-game downloads and downloadable content), and mobile gaming applications, all of which saw an increased demand in 2011.
Anita Frazier, industry analyst at The NPD Group, said that the overall numbers should not be surprising, especially considering that the current consumer market is at the supposed end of its current console lifecycle. She indicated the core gamers remain fiercely loyal to established franchises. This could adversely affect new IP’s across the board.
David McQuillan, President of Games at The NPD Group, said publishers need to take a closer look at how they operate on the digital front:
“Our overall estimate of the market continues to point toward the increased imperative for deeper visibility into digital distribution than is available today, not only in the U.S. but globally. This is the goal of our partnership with EEDAR, and central to our discussions with publishers and others in the gaming community.”
It should come as no surprise, given the current state of the global economy, that sales are down from the previous year. Skyrim director Todd Howard firmly believes that games are too expensive and that the industry needs to come together to define a standard, discussing whether or not the $60 USD price applied to many launches is actually warranted. With the increasing cost and frequency of DLC, it may be time for the industry to reconsider its cost model.
Follow me on Twitter @mattrowland1
Source: Industry Gamers
Imaged edited from photo by Kristen Cantrell.