In a report that few found surprising, Anita Frazier of NPD Group revealed the video and computer games have not been seriously affected by the current economic crisis, and will continue to climb in sales in the year to come.
A brief of the report was given to attendees of the Casual Connect 2009 Conference, and covered retail sales of both PC and console games. Video game use has risen to 63% of the 13+ age population, surpassing movie-going.
Interestingly enough, a comparison of the percentages of activities of kids 2 to 12 between 2007 and 2009 show that video gaming is cannibalizing movie-going and listening to music. Activities such as watching television, playing with toys/games, physical activities, and talking on the phone changed by 1% point or less between 2007 and 2009. Reading, in fact, went up. But both movie-going and listening to music took serious hits between that time period, implying that both reading and gaming became superior activities.
There is no doubt that the electronic entertainment industry is still rocking the economic landscape, rising by $3 billion in 2008 to $22 billion, while the S&P 500 tanked. In fact, this was the only category of entertainment that grew in 2008. For just the first quarter of 2009, that represented 1/3 of the typical household wallet for entertainment. BTW, that 1/3 includes online and download play. The vast majority of these sales were video game software sales, the increase from 07 to 08 being a whopping 26% (as opposed to a few percentage points for hardware sales, accessories, or PC games).
Unfortunately, in 2009 sales were down by 12%, but Frazier claims that this was due more to the release of high profile games at the beginning of the year which the industry couldn’t compete against in later quarters. We’ll see if this prediction bears out by the end of the third quarter.
But retail sales aren’t the only piece of the pie anymore, especially for the PC game world. Computer games are increasingly moving digital, and the downloadable and online subscription world is blowing the old notion that PC gaming is dying out of the water. In 2008, retail PC sales were only $701 million, as opposed to $11 billion for consoles. However, when one starts to look at the DDL world, as NPD has finally started to, one finds a new world altogether.
In just an estimation for 2008, subscriptions for online play were at $740 million, and a $425 million estimate for PC digital downloads. In total, the estimate for 2008 was registered at $1.9 billion. This number is likely to change as actual data starts flowing from the NPD group’s new DDL tracker which they are employing on major portals such as Steam, Big Fish Games, Real Arcade (and it’s associated site GameHouse), EA, Blizzard, Direct2Drive, etc. The estimate given at the Casual Connect brief was more likely to be $14 billion, according to Frazier, as the “official” number doesn’t include ad revenue either.
NPD will be launching other trackers as well, including one for microtransactions in late 2009, and another for mobile games in 2010.
Another interesting fact was that the majority (61%) of retail sales are family-friendly, i.e. in the +10 or friendlier category. This fact belongs in the “we’ve heard that before category”. But outside of that category is the question of how that will impact future reports. Because tracking will include online/DDL/subscriptions, but the online world, for the most part, doesn’t include rating. You’re average Indie game developer doesn’t have the money to get their game rated through ESRB, and though there are alternatives, few developers use them.
When asked this question, Frazier stated that this was still a “work in progress” and that the NPD group was “actively talking to everyone in the industry”.
So, what does all of this mean for Mac gaming? First and foremost, the majority of Mac gaming has moved to downloadable and online play. Having a tracker of this will increase dramatically the numbers of Mac gamers, and sales of Mac games, reported. Secondly, it will show the incredible sales of iPhone games.
I think that this can only result in good for the Mac gaming community, to prove that not only are we still here, but we are making a significant impact on PC gaming and gaming in general, and shouldn’t be forgotten. As several developers I interviewed at Casual Connect noted, they realized that Mac gamers were a significant portion of their user base that they couldn’t afford to ignore. I’m betting that we’re a lot more significant than most industry experts realize. Let’s help them realize it.
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