Americans spent $2.87 billion on video games in the third quarter

By on November 16, 2012, 11:30 AM

The gaming industry has certainly seen better days and according to a new report from research firm NPD Group, the trend continued in the third quarter. Americans spent roughly $2.87 billion on gaming products and services in the quarter, down a single percentage point year-over-year.

Specifically, sales of physical goods like PC and console game discs accounted for $1.07 billion, a full 16 percent less than the same time last year. Consumers spent $399 million on used software and game rentals during the same period but it was digital content that had the biggest impact on the industry for Q3.

Full games, add-on content downloads, subscriptions, mobile games and social network games combined to generate $1.40 billion in revenue from July through September. Digital content sales increased 22 percent year-to-year.

As CNET points out, the industry as a whole has been going through some tough times as of late due to a number of factors including but not limited to sluggishness in the hardware and software market. Today’s consoles are nearing the end of their lifecycle. Microsoft’s Xbox 360 launched in North America exactly seven years ago today while Sony’s PlayStation 3 and Nintendo’s Wii console both hit store shelves roughly six years ago.

Things are expected to pick up in the fourth quarter as always thanks to the holiday buying season. This is the time of year that we typically see the most anticipated games launch and for Nintendo, we’re just a couple of days away from the release of their next generation console, the Wii U.




User Comments: 8

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Guest said:

We live in a sick world ...

Hey, hope to get a few at a discount next friday :D

Time to play a game!

TomSEA TomSEA, TechSpot Chancellor, said:

Half of that money spent was mine, I think...

Littleczr Littleczr said:

To me it feels like you I'm getting less for my money now a days when it comes to PC games.

ikesmasher said:

Concept: lower video game price to say, $45, make your games better, and watch that number jump dramatically.

Tygerstrike said:

It used to be 6 billion dollar industry. Unfortunatly with companies like GameCrazy going out of business, pretty much leaving GameStop as the only competitor in the market for used games. Almost every major retailer tried to do the used game bit, but all fell short. Without a competitive used game market, ppl are holding on to thier games a lot longer now. Trying to sqeeze out as much entertainment they can. Once GameCrazy closed down, the used game market lost the edge that kept it going. Mainly being able to trade in your old games for new ones. GameStop clamped down on their trade ins so you did not get as much as you could. Basically once the used game market fell, the new game market fell. Gamers in general cant always afford to drop $60+ on a new game every few weeks. You can also thank all those ppl who stream movies, or go to redbox because many of your Video rental places would also sell the used rented games. They were one of the largest purchasers of new games. So its a lot of small things that is killing the video game market.

Xclusiveitalian Xclusiveitalian said:

Gaming isn't what it use to be, look at COD and how streamlined and uninnovative they've become. It's a sad day for ALL gamers.

Guest said:

The industry is dying as it moves along because of the greed factor

new games that were used then resold can not be resold anymore

and the economy is lack luster at best and spare money is on an ever tightening budget

the gaming companies are worried about software pirates so extra security is put into the game

games use to be off line now if you have a cheap internet connection you wont be able to play the game

the last reason is the biggest peeve of all you purchase a game for 50.00 (basic Version) to 100.00 (collectors edition) of a game and a year later or less the game is Free to play.

this is wrong it just shows me that to generate more money from a game the game companies are willing to tell their loyal customers to get bent(using nice language not using the F word) you mean nothing to us. This is just wrong

why should I spend money on a game only to have it turned into a free to play game then I can download it and try it

davislane1 davislane1 said:

It used to be 6 billion dollar industry. Unfortunatly with companies like GameCrazy going out of business, pretty much leaving GameStop as the only competitor in the market for used games. Almost every major retailer tried to do the used game bit, but all fell short. Without a competitive used game market, ppl are holding on to thier games a lot longer now. Trying to sqeeze out as much entertainment they can. Once GameCrazy closed down, the used game market lost the edge that kept it going. Mainly being able to trade in your old games for new ones. GameStop clamped down on their trade ins so you did not get as much as you could. Basically once the used game market fell, the new game market fell. Gamers in general cant always afford to drop $60+ on a new game every few weeks. You can also thank all those ppl who stream movies, or go to redbox because many of your Video rental places would also sell the used rented games. They were one of the largest purchasers of new games. So its a lot of small things that is killing the video game market.

Markets change, nothing out of the ordinary about that. I'd argue that two of the biggest reasons the industry has seen a decline with respect to consumer spending is that, contrary to your original statement, (1) the used game market has grown over the past few years and (2) pricing has increased while quality has decreased.

As you mentioned, most of the brick-and-mortar locations have disappeared. IMO, this hasn't been a negative for the used game industry because there is a huge online market for both new and used games that offer customers far more value and flexibility than what existed in the 90s and early 2000s with GameStop and others (Glyde comes to mind as an example). Moreover, the growth of online retailing has a profound effect on consumer spending for anyone who shops around, since you can almost always get a better price versus what you'll pay at GameStop, Wal-Mart, etc. If people can shave 10%-20% off their purchase, buy and sell used with similar utility, you'll be hard pressed to make a physical sale without a major incentive.

But I'd speculate that the biggest reason there's been a decline in consumer spending is the price/quality factor. I used to have no problem dropping $50-$60 on a new game, back when I knew I would get a quality product. These days, that won't happen (with rare exception, of course). The creativity and innovation in the gaming industry has largely stagnated in favor of mass repackaging by major publishers. In response, I now wait for my price ($5-$20) instead of being suckered into paying full retail for a game I already have 5 copies of. Seeing that this is hardly a minority position anymore and that, because of online retailing, independent devs are better able to fill the creativity void, they're going to have trouble maintaining big consumer spending numbers in the immediate future. The current economic climate doesn't help either.

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