Game Sales Are Dead, Long Live Game Sales

It's become popular at the moment to worry about the death of gaming as we know it. The meteoric rise of mobile handheld platforms certainly has been disruptive and, as Kotaku Editor-in-Chief Stephen Totilo reported earlier today, there are valid concerns about the longevity and existence of console-based gaming in the future.

The future of hardware can be hard to predict. But what of the software? What can the future hold — on any platform — for the games that give devices their purpose? At first blush, current sales figures don't look promising, and the trends look bad. Gamasutra reported on the February, 2012 sales figures as monitored by the NPD Group, comparing them to the February, 2011 sales figures. Year-over-year sales dropped by 20%.

And yet, the numbers themselves are not as bleak as they at first appear. Gamasutra reports both:

As usual, software was the biggest deterimental factor, with $US485.7 million in sales representing a 24 per cent decline from February 2011, according to data from the NPD Group.

And also:

The NPD Group is currently working with EEDAR to generate quarterly reports on game sales through other methods, including used games, rentals and digital sales. The Group estimates these other methods accounted for an additional $US550 to $US600 million in sales.

If the estimates are accurate, then the numbers being touted and circulated as "video game sales" represent less than half of the actual volume of game sales. And then of course there is the massive pile of revenue that may or may not count as traditional game sales at all, as the popularity of microtransactions truly takes root and spreads.

GamesIndustry has Daniel Kim, CEO of free-to-play game company Nexon, commenting on where he thinks the future of game releases will go.

He cautioned, "If your mind is just set on keeping the current model of buy a game for $US60, play for 40 hours, buy another game for $US60, play for 40 hours, that model I think is eventually going to change. It's going to have to change. How they will adapt I really don't know, but I hope that they're aware enough to understand that the value proposition of free-to-play is not going to go away."

Even Kim doesn't know for sure if the free-to-play model, in its current form, will linger and dominate the next real cycle of gaming. But, he says, the owners of the hardware need to be open to whatever systems the designers of the software want to try:

"I think at some point the console makers have to make a decision about how closed or open they're going to be to the different models that are going to be emerging. Today it's free-to-play, and I'm convinced that that one is going to continue to flourish and expand into other genres and other categories, but there may be something else completely and entirely different that comes out that again changes the industry."

Ultimately, then, that seems to be the true comment on the future of gaming platforms: not that they must be portable, or that they must allow visuals 40" wide, or that they must use analogue sticks or anything else. The platforms of the future, and the games we play on them, need to be flexible, accommodating, and open to new things.

Meanwhile, although the baseline may or may not be shifting downward, certain big-budget franchises still manage to sell millions and smash records. Mass Effect 3, the most recently released blockbuster, sold 890,000 copies in 24 hours and shipped 3.5 million in the first week. Record-holding entertainment juggernaut Modern Warfare 3 sold 6.5 million copies in just the first 24 hours of its release last fall, and remains a top seller. The $US60 price point may not last forever, but for the time being consumers seem quite willing to accept it. And while consumers accept it, the market to recoup the investment in a $US100 million, 40-hour, narrative, console-style AAA top-notch game is still there.

Ten years from now we may not recognise the shapes our games take, or the ways in which we play them. But we will always have games. And while change is inevitable and often disruptive, it also takes time. The rise of smaller games using different sales models, across all platforms, increases the number of games in the world as well as the number of people who are willing to play them. We won't be seeing the death of the complex epic anytime soon.

(Top photo: Flickr user marioanima)

Comments

    I have no doubt that games will survive. The main thing that I think will change will be the medium that we play them on. I like to think that the console will whether that storm.

    Just like the arcades of old. With their better controls and larger screens. The consoles will die out to these inferior products.

    If you ever thought gaming was dead then you were quite naive. Gaming has been a huge rising industry for years and if the posting by companies recently like activision making over a billion dollars and EA having their biggest financial quater in 8 years wasn't obvious then you must have been falling for the dev/pub tactics of we need online passes and dlc to compact second sales propaganda.

    I think gaming has increased in stature and scale enough to accommodate several different markets. I for one will not be relinquishing console gaming any time soon.

    A 24% decline in software sales. It's no wonder, with the used game market becoming more profitable.

      Not if you take into account overseas sales as the prices are like 50 -70% cheaper plus online digital sales. You believe they are hard done by then they have just found another gullable person to buy their dlc and online passes.

      Explain then how these companies keep posting record profits. Activision recently posted a profit over a billion and EA highest financial quater in 8 years, not bad for companies low on sales. And even if sales were down which theyu arn't, maybe its got to a point were people are tired of incomplete games that are sold off in pieces or in more complete versions later. The companies only have themselves to blame now with public perception. Milk the cow long enough it drys up or moves on to something else.

    The problem is that releasing a game on console at less than that magical $60 price point actually works against the game. People assume it's got something wrong with it, that it's less of a game or just an expansion pack or something if it's less than the 'full' price. So you're either developing a $10 downloadable game or a $60 AAA console game. There needs to be more room in the middle for the $30-40 B games.

    Or how about the fact that in AU, it still costs A$100 for any new game regardless of whether it takes 6 hours to finish (UC3) or 80 hours (Xenoblade). But when you order it from overseas like the UK, you can get it for just A$50. It'll simply revolve around whether you think the price is right for it.

    Or how about selling your recently finished games on Ebay? Someone will buy it, that's a guarantee.

    Alternately, you can always consider renting them for your nearby BB store or always visit getgaming.com.au or rentagame.com.au for your game renting needs. I recently paid $22 a month just so I could get my hands on ME3.

    There's still plenty of options out there for playing games based on the price that you want.

    I don't particularly mind how the delivery method changes or where I have to play them so long as it is NOT on a touch-pad or those awful "virtual joysticks" ios devices use.

    Actually... just sell me everything on pc instead and I will be perfectly happy.

    When they do feel threatened they'll just adjust the price of hard copy stuff. Atm they're just reaming in the money

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