2011 Saw Considerable Drop in Video Games Sales: NPD Group

NPD Group (News - Alert), a market research firm that analyzes consumer behavior and market trends, has announced in its latest report that the overall sales of video games have seen a noticeable decline during the year 2011, the month of December making a noticeable contribution to the drop.

Established in the year 1966, the company has been offering consumer and retail market research solutions for a wide range of industries, including consumer behavior and point-of-sale information and industry expertise

The report suggests that while the total industry sales for the video games sector were $18.59 billion during the year 2010, the sales volume in the year 2011 could barely touch the figure of $17.02 with an annual drop of around eight percent. Also, during the month of December 2010, the market sector registered an overall sales volume of $5.07 billion, which fell to a figure of $3.99 billion in the month of December 2011, indicating a drop of around 21 percent.

Further, the study says that the decline in sales of video games in physical retail stores has been occurring due to more and more gamers shifting their purchases to online, social and mobile forms of gaming, also known as digital gaming. Still, the growth in sales of digital gaming products is not being able to match the consistently higher rate of drop in physical retail sales, which has been playing a vital role in the diminishing volume of overall video games sales. The total volume of video games hardware sales in December 2011 saw a drop of 28 percent when compared to the same during December 2010, while the total sales for video games software dropped by 14 percent.

Additionally, the NPD Group states that the estimated total consumer spending on games excluding the hardware devices in the year 2011 was approximately $16.3 billion, showing a drop of around two percent from the year 2010 sales amount to around $16.6 billion. This volume of sales comprises of physical video and retail games, used games, game rentals, subscriptions, full-game digital downloads, social network games, downloadable content and mobile games.

“Overall industry results are not entirely surprising given that we are on the back end of the current console lifecycle, combined with the continued digital evolution of gaming,” commented Anita Frazier, analyst at the NPD Group. “Core gamers continue to be engaged and spend on established franchises across both the digital and physical format using multiple devices for different gaming occasions.”

Earlier this month, the NPD Group’s Retail Tracking Service announced that U.S. sales of stereo headphones priced above $100 more than doubled in 2011, outpacing the rate of growth overall in the category.

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