Video Game's Survive Recession, But At What Cost?

Despite the recession and a drop in video game sales last year, December was the biggest month in the history of video games.

A combination of console price cuts, a holiday rich in spending and the recent release of several chart-busting titles helped the game industry pull in $US5.53 billion in December alone, according to the NPD Group.

But December was one of only four months to see an increase in sales compared to 2008, leading to a drop in annual sales of eight percent in an industry once described as recession proof.

"Clearly, 2009 was tough year for consumers and the national economy. However, the bigger picture is one that underscores the industry's strength; 2009 and 2008 were the highest grossing years in our industry's history," said Michael D. Gallagher, president and CEO of the Entertainment Software Association, the US association representing computer and video game publishers. "That said, our industry's structure is solid, and I anticipate a strong 2010 with a pipeline full of highly-anticipated titles."

Much of 2009's sales came from Nintendo, which had seven of the 10 top selling console and portable games of the year and record breaking hardware sales.

Nintendo's DS sold more than 11.2 million in 2009, a US calendar-year sales record, and the Wii finished the year with 9.6 million sold, with nearly one-fifth of Wii consoles sold since it's 2006 launch happening in November and December of last year.

"Wii, Nintendo DS Lite and Nintendo DSi combined to sell more than seven million units in the month of December alone," said Cammie Dunaway, Nintendo of America's executive vice president of Sales & Marketing. "Clearly there is overwhelming consumer demand for fun games, motion controls and value. This remarkable hardware sales surge presents a tremendous software opportunity for Nintendo and its third-party partners as we head into 2010."

And Nintendo isn't the only company excited about 2010, Wedbush Securities analyst Michael Pachter writes in his monthly report on the video game industry that it is a "relief to finally put 2009 behind us" adding that 2010 is going to be a big year.

This year starts out with a bang, rolling out an unprecedented number of big titles. Many of these possible blockbusters were initially set to hit stores last holiday, but were pushed back into early this year, creating the potential for a second big run of game purchases.

Among the standouts are Dark Void, Bayonetta, Mass Effect 2, Darksiders, MAG and Army of Two. February and March also have a share of big games hitting, leading many to speculate that 2010 could show not just a rebound of the game industry, but a surge in sales.

Pachter calls the release schedule for the first half of this year "one of the strongest in history".

While it looks like the industry as a whole has weathered the economic storm, that doesn't mean it was left unchanged. Diving down into the numbers shows that a bulk of the industry's revenue was generated by a handful of the biggest publishers, companies like Electronic Arts, Activision and Nintendo. Smaller studios were absorbed or shut down.

This consolidation of development power will likely have a lasting impact on video game innovation and creativity. Only time will tell whether it will be a positive one.


Comments

    "Video Game’s Survive..."
    "...sold since it’s 2006 launch..."

    Man I hate bad punctuation, especially from journalists.
    It's a pet hate of mine.
    If you don't know how to punctuate by this time, or at least proofread after you've finished an article...well there's no real excuse.
    Learn how to use apostrophes!
    I don't care if it's nitpicking, that's their job for chrissake!

      Anal retentive much?

      Then again, one could argue that using "chrissake" in place of "Christ's sakes" is a spelling faux pas in its own right.

      "...sold since it's 2006 launch" is grammatically correct. The apostrophe is used in this case to indicate ownership... as in, "the 2006 launch of..." I have a feeling the apostrophe error in the first part, "video game's survive" was a typo not a grammatical mistake. Let's not be too harsh now...

        actually, the correct possessive pronoun is "its". "It's" is a contraction of 'it is' or 'it has'. so "...sold since it's 2006 launch.." is grammatically incorrect.

        this article has a bit of grammatical errors, which is startlingly common nowadays within internet journalism.

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