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NPD: Video Game Q1 Consumer Spending Falls 13%

2 Jul, 2012 By: Erik Gruenwedel

Consumers in the United States are spending demonstrably less on new-release physical and PC-based video games, with sales in the first quarter dropping almost 13% to $3.4 billion from $3.88 billion during the previous-year period, according to new data from The NPD Group.

In the period ended March 31, consumers spent $1.5 billion on new physical video and PC game software, compared with $2.03 billion last year. Total consumer spending on other physical forms of content (used and rental) reached $525 million, and content in digital format (full game and add-on content downloads, subscriptions, mobile games and social network games) generated $1.38 billion.

By comparison, total consumer spending in Q1 on content via other monetization methods, including used games, game rentals, subscriptions, digital full game downloads, social network games, downloadable content and mobile games reached about $1.85 billion.

“The declines in the physical market for new physical software are well documented,” said Anita Frazier, industry analyst for The NPD Group. “But, a broader view of the games industry shows that other physical content sales (the combination of used and rental) declined by just 5%, and digital format content sales grew by 10% as compared with Q1 2011. While the growth in digital format sales does not yet offset the declines in physical format sales, clearly the changes occurring within the industry are reflected in the trends we are seeing in the research.”

Similar research in the United Kingdom, France and Germany showed that spending on other forms of physical games content outside of new physical retail sales totaled $300 million (used and rental), while digital format sales in those three countries (full game and add-on content downloads, subscriptions, mobile games and social network games) generated an additional $959 million in sales during Q1 2012.

“Relative to the spend in the U.S., we find that the consumer spend on mobile games is still developing in the three European countries we are covering, while the spend on full game and add-on content digital downloads and subscriptions is more highly developed,” said Frazier.

About the Author: Erik Gruenwedel

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