NPD Group released its numbers today for December and all of 2011, and well, it capped off what was largely an ugly year in the physical software business. In December, total industry sales dropped by 21% to $3.99 billion compared to last December's $5.07 billion. Hardware was down 28% and software dipped by 14%. This certainly didn't help the year-end total for 2011, which came to $17.02 billion, down 8% from 2010's $18.59 billion. For the full year, hardware and accessories were each down 11% and software declined six percent.
The total picture, as we all know, is not fully reflected by looking at physical only. From a total spend perspective on game content, NPD's latest Total Consumer Spend report (not including hardware) shows sales around $16.3 to $16.6 billion for 2011, which is down two percent from 2010. The NPD Group does note that this is still a preliminary estimate, and a final estimate of the total consumer spend on the games industry will be released in March.
While digital continues to grow, it's clear that physical sales are still the dominant force in the industry. NPD estimates that spending on new physical content at retail including portable, console and PC game software, generated revenues of $9.3 billion, which is an 8 percent decline over the $10.1 billion generated in 2010. That said, there were increases in the consumer spend on used games sales, full-game digital downloads and downloadable content, and mobile gaming apps, which partially offset physical declines.
“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. 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,” said Anita Frazier, industry analyst, The NPD Group.
“Our overall estimate of the market continues to point toward the increased imperative for deeper visibility into digital distribution than is available today, not only in the U.S. but globally. This is the goal of our partnership with EEDAR, and central to our discussions with publishers and others in the gaming community,” said David McQuillan, president, Games at The NPD Group.
