US Video Game Content Sold 4.5 Billion in Second Quarter

LAN PartyThe market research group, NPD, released their findings for the second quarter of the video game market earlier today, estimating that total spending on both physical and digital products totaled $4.5 billion in the U.S. A specific breakdown reveals that U.S. residents had spent $1.44 billion on new video game consoles and PC physical media. The report estimates that $1.74 billion was spent on used games, rentals, subscriptions, digital full-version video games, DLC, mobile games, and social network games. It also estimated that a total of $4.5 billion was spent on video game hardware, content, and accessories, an increase of 1% over Q2 2010.

Anita Frazier a industry analyst at The NPD Group had this to say about their results:

“While the new physical retail channel still generates the majority of industry sales, our expanded research coverage allows us to assess the total consumer spend [sic] across the growing number of ways to acquire and experience gaming, including mobile apps and downloadable content.”

Back in April of this year, it was revealed by the NPD via the LA Times that, even though hardware sales were up 12%, software sales were down 4% at the same time in March 2010. At that time digital, social games, and DLC were not taken into account, and the NPD estimated that such spending accounted for 23% of over all game sales in the U.S. last year.

Analysis: The fact the NPD is taking digital sales into account is obviously showing us that the gaming market isn’t necessarily in a downturn, but is instead shifting from a psychical to a digital distribution of games. This is how I personally receive all my video games now, not because I don’t want psychical media, but because it’s much easier for me to acquire it. This is probably the mind set of many other Americans as well. We’re shifting to a digital market because it’s quicker, easier, and takes less time out of our day to get, and who wouldn’t want that?

The video game market did not gain much ground in the second quarter, but I believe that has to with what games were coming out at that time more than anything else. I’m fairly certain we’ll see a spike in sales from September 2011 to March 2012 with so many highly anticipated titles coming out and with Christmas right around the corner. I think it’ll still carry into 2012 a little bit because we have Star Wars: The Old Republic (SWTOR) coming in late December with its limited release and Mass Effect 3 in March. I don’t think it will remain on that high, though. What I think will happen is it’ll start to tapper off in late January, holding moderately high with SWTOR, and will jump a little bit in March with Mass Effect 3.

The only problem with a high is the lows, and without much announced for the time after that, we will see another major dip in game sales. I believe the market will probably shift toward less expensive digital, mobile, and social games. Now, it might not be as strong as individual companies may want it like EA or Activision, but it will carry the industry, and I doubt we will see much of a dip over all at that time.


About Brandon Mietzner