2012/08/10

Retail in trouble?

Gamesales are down - again - by 20%. Is retail in trouble? Or does NPD Data simply negate online sales or have not sufficient data? Does NPD count in App store sales on iOS?

Some facts about 2012:

1) We are in a transition year. This means the old consoles are dying, the sales volume is lower and so are games on consoles. Reason: most games are sold to users of new consoles, not existing ones. New consoles are either not anounced yet or coming later - sales volume doesn't exist. No wonder publishers are in trouble.

2) Games price structue is under pressure. While free to play promotes "free" the high quality games on iOS are either $1 or less or free to play as well. I regulary read reviews from iOS games where they say "its ok to pay $2 for that game". What would that guy say to spend $60?

So why should someone spend $60 for a console game when there is choice "out there" for free?

Some Reasons:
1) IP, i.e. prior experience with that game IP like Assassins Creed, Call of Duty and the like
2) Game production value. Games on consoles are high value and expensive productions
3) Location of gaming: consoles are living room, PC is office room, mobile is - well - mobile
4) missing alternative. Madden football or Fifa Soccer can't be found as f2p or on iOS

The good: market is expanding, everyone plays, we know that now.
The bad: the next generation consoles better embrace online and new business models like f2p or they have severe troubles.

Fun fact: NPD is the worst name for a company as from German point of view they represent the Nazis (NPD=Nazi party)

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