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NPD: 2011 Video Game Spending Declines 9%

12 Jan, 2012 By: Erik Gruenwedel

An underperforming December month in sales of new video games and consoles contributed to an estimated 9% drop to $17.02 billion in overall 2011 consumer spending, according to new data from The NPD Group.

The tally, which includes new hardware, physical video and PC games, digital full-game downloads, social network games, downloadable content, mobile games, and accessories, reached nearly $18.6 billion in 2010.

By comparison, consumer home entertainment spending on physical and digital movies topped $18 billion in 2011, according to DEG: The Digital Entertainment Group.

Sales across all categories for the Xbox 360 and the PS3 were up 5% for 2011. The two platforms picked up 9 share points in total sales versus 2010. However, when combined with all hardware options, including Nintendo’s Wii, 3DS and DS, new hardware sales dropped 11% to $5.58 billion from $6.29 billion. Accessories dropped 11% to $2.61 billion from $2.95 billion.

“The Xbox 360 platform accounted for nearly 40% of 2011 new physical retail sales across all categories,” said industry analyst Anita Frazier, underscoring Xbox’s enduring appeal.

Retail sales of new physical video game content, which includes portable, console and PC game software, reached $9.3 billion, an 8% decline over the $10.1 billion generated in 2010.

“Overall industry results are not entirely surprising, given that we are on the back end of the current console lifecycle, combined with the continued digital evolution of gaming,” Frazier said. “Core gamers continue to be engaged and spend on established franchises across both the digital and physical format, using multiple devices for different gaming occasions.”

David McQuillan, president of games at NPD, said the market continues to point toward the increased imperative for deeper visibility into digital distribution than is available today, not only in the United States, but globally.

The NPD Group will release final 2011 gaming revenue data in March.

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