Contact Center Industry News

TMCNet:  Video game sales down, but why? [St. Joseph News-Press (MO)]

[December 06, 2012]

Video game sales down, but why? [St. Joseph News-Press (MO)]

(St. Joseph News-Press (MO) Via Acquire Media NewsEdge) If Nintendo brought about the Silver Age of Gaming in the mid- 1980s, it appeared the Golden Age of Gaming was kicking off in 2010.

Two years ago, video game creators were declaring their medium the next great art form. Titles like "Uncharted 2,' "L.A. Noire,' "God of War 3' and "Heavy Rain' were matching the drama and visual spectacle of blockbuster movies and also were captivating gamers all over the world with their interactivity.

The surging potential of the video game business was met with surging sales. More than 200 million Wii, Xbox 360 and PlayStation 3 systems had been sold worldwide. Sales of portable gaming devices like the PSP and Nintendo DS were up as well. More than 12 million subscribers were paying $15 a month to play Blizzard Entertainment's online game "World of Warcraft,' and Blizzard's competitors were developing worthy rivals. Following in the footsteps of the Wii, Microsoft's motion-sensing Kinect system was generating tons of buzz in 2011 by promising to free players from buttons with controllers.

Today, however, the video game giants find themselves in financial peril.

Through September of this year, retail sales of video games plummeted 20 percent in the U.S. This comes on the heels of a lackluster performance in 2011, when sales fell 8 percent. Not to mention, this was the year that the monthly $15 subscription for major online games became obsolete. Most business analysts predict that 2012 will be the worst year for retail video game software and hardware sales since 2005 or 2006.

The struggling economy certainly has been a factor in the decline, especially considering that young men " the core audience for video games " were hit so hard during the recession. But there's more to this gaming decline than a lagging workforce, says C.J. Strike, social media manager for and former editor of He attributes the current downfall to a lack of console innovation. It has been more than seven years since Microsoft released the Xbox 360 and more than six since Sony put the PlayStation 3 on the shelves.

The wait for something new has been too long, he argues.

"The current hardware is still selling, but gamers want the next big thing,' Mr. Strike says. "They see PC games now that look magnitudes better than what's on consoles and they want that experience.' Nintendo finally closed the wide gap between console releases last month with the release of the Wii U. The Wii U is the first Nintendo console to support high-definition graphics, and it's the first console to utilize the GamePad, a controller that features an embedded touchscreen. The touchscreen is used to supplement the main gameplay shown on the television or, with some games, it allows the player to continue playing games when the television is off.

Anchored by these new features, the Wii U already has sold approximately 440,000 units in the U.S. and more than 1.2 million total around the globe (as of Dec. 3). That might sound like a lot, but the number is actually quite underwhelming. Consider this: The Xbox 360 radically outsold the Wii U in North America on the week of Black Friday. About 750,000 Xbox 360 consoles sold that week compared to only 400,000 Wii U systems. Even with those additional 750,000 units sold, Xbox 360 sales are down by a third this year (while PS3 sales are down by a quarter) according to Bloomberg's video game business analyst Doug Creutz.

Mr. Strike says the Wii U doesn't have the bells and whistles gamers have desired from a new console, and its sales might struggle because of it.

"The lack of new hardware has hurt a lot, and I don't think the Wii U is the hardware gamers were looking for to get rid of that feeling,' he says. "It is using only slightly better internals than the 360 and PS3.' Mr. Strike expects the gaming business to continue to suffer until the new Xbox and PlayStation consoles are released in the fall of 2013. These new systems certainly will boast many more features than the Wii U, he says.

"They will drum up hype and get those who had let their collection sit back on board and buying games,' Mr. Strike says.

However, Stephen Toltilo, editor-in-chief for the gaming website, isn't so sure. For, you see, there is another reason that the major video game companies have been struggling since 2010.

"Big companies no longer dominate the creation of video games,' Mr. Toltilo says. "Free-thinking, independent creators are on the rise, and they're making some fascinating games.' This development will sound familiar to anyone whose CD collection is only collecting dust these days. Less expensive digital downloads are disrupting the video game business model. Nearly everywhere, it seems, people have been sharing "Words With Friends,' hurling "Angry Birds' at pigs or raising crops in "FarmVille.' All of those games, made for smart phones and tablets, are popular and can be purchased for pennies. This factor has really hurt the sales of handheld gaming devices.

"Kids are getting iPads instead of the Nintendo 3DS and the PS Vita,' Mr. Strike says.

These cheap smart phone and tablet games have damaged sales of new Xbox, Wii and PlayStation games. Few want to pay $60 for a new video game disc anymore, Mr. Toltilo points out.

The numbers are on his side. Mr. Kreutz says that seven non- sports games sold more than four million units in North America and Europe in the fall of 2011. This fall, he is predicting only four ("Borderlands 2,' "Assassin's Creed 3,' "Halo 4,' and "Call of Duty: Black Ops 2') will reach that mark.

It was 29 years ago that Atari buried millions of unsold video games in a New Mexico landfill. The video game industry barely survived the brutal recession of the early 1980s, and many are wondering if the gaming giants can climb out of this one. But a lot can be done, Mr. Toltilo says, with a little imagination and consideration.

"We can only weep for corporations so much' he says. "... The play's the thing. All else is second.' (c) 2012 ProQuest Information and Learning Company; All Rights Reserved.

[ Back To Cloud Contact Center's Homepage ]


Featured Resources

Featured Report
Millennial Research on Customer Service Expectations

Millennial Research on Customer Service Expectations

The "why" behind this research is simple: our clients recognize that different generations bring different expectations, varied communication preferences and new customer service patterns to the customer experience...
Featured Report
Optimizing the Customer Experience through Cloud Contact Centers

Optimizing the Customer Experience through Cloud Contact Centers

Adoption of cloud contact centers is on the rise. Findings from Aberdeen's January 2014 'Public Cloud vs. On-Premise: How to More Effectively Deploy a Cloud Center' study shows that 31% of contact centers are deployed in the cloud, and our related blog post highlights that companies anticipate their adoption of cloud technology to rise further throughout 2014...
Featured Report
Aberdeen report

Aberdeen Report: Cloud for Mid-Sized Contact Centers – What You Must Know

Cloud Technology is opening new doors for many businesses. However, it does so only when it's combined with the use of best practices and key technology enablers. This document highlights the adoption of cloud technology by mid-size contact centers and illustrates the reasons driving their investments...
Featured Whitepaper
Aberdeen report

Seven Critical Capabilities to Demand From Your Cloud Contact Center Provider

To deliver a world-class customer experience, your contact center must be flexible and reliable, while providing all the tools agents and supervisors need to manage their workflows. Here are seven critical capabilities to look for when deploying a contact center in the cloud...
Featured Webinar

Contact Center Economics and the Cloud

Together, Bob and Drew will help you understand the economic value of upgrading technology, important business and financial considerations, and how to compare total cost of ownership of a premises vs. cloud or hosted solution. Watch the webinar on-demand now...
Featured Datasheet
Zipwire Cloud Contact Center

Zipwire Cloud Contact Center

The appeal of moving services to the cloud is obvious. Cloud services offer reliability and robust feature sets without the need to implement or maintain complex contact center infrastructure. The Zipwire™ cloud-based contact center allows businesses to leverage the flexibility and cost savings of cloud architecture while offering a seamless, first-class customer experience...