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NPD: Video Gamers on the Decline

5 Sep, 2012 By: Erik Gruenwedel

Americans appear to be tiring of playing video games, according to new data released by The NPD Group.

While more than 210 million people in the United States play video games, that figure is down 12 million (or 5%) from 2011. A trend that is consistent with monthly declines in sales of new and used games and hardware — and probable bad news heading into the fourth quarter and winter holiday retail.
Of the six gamer segments tracked by NPD, only mobile gamers and digital gamers saw increases in the number of users when compared with 2011.

The mobile gamers segment reached 22%, up from 13% last year, while digital gaming is up 4 percentage points to 16%. All other segments, which include core gamers, family and kid gamers, light PC gamers and avid PC gamers, experienced declines, with the family-and-kid segment experiencing the most significant decline of about 17.4 million players.

In an online survey, NPD found that gamers reported spending an average of $48 on physical games and $16 on digital games-PC, console or portable in the past three months. Core gamers (notably on Xbox 360 and PS3 consoles) spent $65 on physical games during the same time period; this is more than any other gamer segment. Close to 14% of total gamers said that they purchased micro-transactions or additional game content in the past three months versus 11% during the same time period in 2011.

Core gamers and digital gamers represented the largest group of buyers at 27% and 23%, respectively.

“Given the long lifecycles of the current consoles and the increasing installed base of smartphones and tablets, it's not surprising to see a slight decline in the core gamer segment,” industry analyst Anita Frazier said in a statement. “It’s the revenue contribution of the core gamer segment that continues to outpace all other segments, and remains vital to the future of the industry.”

Michael Pachter, analyst with Wedbush Securities in Los Angeles, said the rise in mobile and Web-based gaming is not a threat to industry stalwarts Xbox 360 and PlayStation 3 — both of which he said continue to dominate the market in both physical and digital gaming.

“Those both threaten casual games, so they kill handheld and [Nintendo] Wii games, but they don't impact Xbox 360 or PS3 much, if at all,” Pachter wrote in an email.

Frazier concurred, saying ongoing changes in the industry coupled with aging console systems portends a strong future.

"I do believe new hardware systems will bring a much-welcomed stabilizing force and bring more gamers back to bigger gaming experiences," she said.

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