Results, both physical and digital, have been released for video game spending in the second quarter of this year and it's not looking too pretty (if you're an investor). Spending is down by 3% compared to the previous year during the same quarter, and Americans only spent $2.88 billion on games, down from $2.97 billion in the previous year.
Forbes has a very detailed breakdown of the NPD Group's numbers. Noting that digital goods, subscriptions and add-ons equated to $1.77 billion in spending throughout the second quarter, with retail goods managing $769 million across home consoles and PC. The used game market that's supposedly killing the industry? Well, it only managed $343 million and that number is shared between rentals. Killing the industry my foot.
Spending, overall, was down 9%.
NPD Group analyst Liam Callahan, mentioned in a statement that...
“The decrease in new physical spending… is to be expected as developers, publishers and consumers alike prepare for the next hardware generation,” ... “Increases in digital format spending offset nearly all the losses from the declines in physical format spending, with digital full game downloads and downloadable content spending experiencing a combined 27% increase when compared to Q2’12. Spending increases occurred across both video games and PC games in the digital format.”
Oh, what's that? Digital game spending has offset retail losses? Well, doesn't that tie back into the report we did earlier citing that DLC makes just as much money as the used game market? So the “problem” of used games is a fading thorn that's losing its thistles while the edge is being dulled by an increase in sharp rising digital sales? I mean, who would have thunk it?
In addition to this, many analysts are already estimating that sales across the gaming sector will surge once the new game consoles are released. They also estimate that spending will continue to decrease each month as gamers save up for the next-gen platform releases this fall. The new generation is long overdo and we've been settling for a lot of sub-par titles as most publishers standardized outings (without curtailing the budgets) to meet the aging and decrepit conditions of the current generation consoles.
With the PS4 and Xbox One on the horizon, along with big first-party titles on the works for the Wii U, it's likely we'll see the industry bounce back in no time. The slight decline should be expected given how saturated the market is right now with games that can't push anymore boundaries and hardware that has hit the technical ceiling a long time ago.
Thankfully, those of us looking toward the future will be able to embrace the new-gen consoles once they land on store shelves this November, and the eighth generation of the console wars will commence, officially.
I'm betting many analysts can't wait to see what the fourth quarter results will look like for 2013. It will also be fascinating to see what the spending looks like across the many different PC digital distributors as well, and noting if it increases or decreases significantly affect their business in light of the new consoles coming to the market.