Last week, we alerted our games industry clients and media covering the space to some changes we’d be making to our monthly, external reporting of video games sales stats. While this news was, in some cases, a hard pill for some to swallow, we believe it is an important step for the industry. Why? Because we’ve long acknowledged that our reporting of monthly point-of-sale purchases (covering new physical sales of hardware, software and accessories only, not used game sales) did not represent 100% of the consumer spend on the industry.
Since new physical sales at retail have been down for some months now, the news that the industry is beleaguered has been widely covered, and it has caused unnecessary angst for many. So, while the monthly POS sales reporting still represents the majority of the consumer spend on the industry, we believe that by reducing our reporting on that portion of the market, and augmenting it with our new report, Games Industry: Total Consumer Spend, which looks at, and measures, the other avenues consumers are acquiring games content, we would provide a better, more comprehensive look at just how big the games industry is.
This new report covers not only what we’re best known for (our sales tracking of new physical retail purchases), but it adds coverage of consumer spending on used games, rentals, mobile apps, social network games, and digitally acquired content in the U.S. The pilot issue of this new report will be available later this month, but for some highlights you can read the press release we issued last week. The games industry is experiencing one of the most transformative periods in its rich history; new technologies and ways of gaming, new consumers being introduced to gaming, and new avenues of distribution all play major roles … and we’re excited to be evolving our coverage of the market to accommodate the industry.
Last December, I blogged about my experiences running my own virtual cafe’ in Cafe’ World via Facebook. Since then, I spent a lot of time in Cafe’ Frazier, sending gifts of food and stove parts to friends, cooking up a storm to keep my level higher than those of my neighbors, and trying out new decor items. There are times when I am too busy to play online, so I go dark for a period of time, but something always seems to reignite my interest, and I get sucked in again.
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Last week, when The NPD Group posted video game industry sales results for March, one could almost hear the collective sigh of relief among stakeholders; that after a fairly long drought, there was some good news to report. The industry recorded a gain of 6 percent in total revenues generated, and along with that top line gain, several records were noted as well. For me, it’s always more fun to report good news than bad, so here are just a few of the stories pulled from analysis of the data:
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According to U.S. Census Bureau estimates, in 2009 there were approximately 62 million kids age 0-14 in the United States. These kids comprise 20 percent of the total U.S. population, representing an enormous consumer base, even though adults have much authority over what is purchased for them. Much, but certainly far from all. Even very young kids exert a good deal of influence over the purchases made on their behalf.
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When I was 16, I got my first non-babysitting job and spent four months toiling at the drive-through window of my local Carl’s Jr. restaurant. Being a quick study, “Want some fries with that shake?” or “Can I interest you in a hot apple pie this evening?” soon rolled off my tongue at the end of every order as I eagerly attempted to up sell customers.
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During some of my “kid-oriented” presentations, I will often talk about some of the things that we adults can still remember, but that kids of today have never been exposed to - like rotary-dialed phones or 8-track tapes. I was reminded of this recently when I had my car in for service and was given a loaner for the day, and the car actually had manual roll-down windows. My kids had no clue how to operate them, and a verbal explanation wouldn’t do - I had to visually demonstrate the hand-cranking method for them as they stared on in disbelief.
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I fondly remember the things my parents used to say whenever we complained about things, like walking a quarter of a mile down the street to the bus stop for school. “When I was a kid, I walked three miles to school, through a snowstorm,” was one of my all-time favorites. And, of course, as most of us have, I vowed never to say these types of things to my own kids. And like most of us, I have failed miserably at keeping this promise.
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Like many of you, I spent a good portion of my Thanksgiving weekend cooking. In addition to the traditional turkey, stuffing and pumpkin pie, my weekend menu included hundreds of portions of Triple Berry Cheesecake, French Onion Soup, chips and guacamole, home-style pot roast and Tikka Masala Kabobs. Now, mind you, not all of this was real food. Much was conjured up in Cafe’ Frazier compliments of Cafe’ World, one of the most popular social networking games on Facebook. As my kids observed me running to the computer to serve up my fruit salad before it rotted on the stove (who makes fruit salad on the stove anyway?), they soon became curious and interested themselves, and before I knew it, I had created a Facebook account for my 7 year-old twins so they could run a cafe’ of their very own. And my kids have a lot of company when it comes to gaming.
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I was shopping last weekend for a gift for my twins to take to their friends’ party, and I entered my local specialty retail store without a preconceived notion of what I was going to get, but with a definite price range in mind. As my kids suggested various items to me, I evaluated it against my predetermined price range. Too often, my response to their suggestion was, “No, honey, that’s above my price range,” but eventually we settled on the perfect gift for the boy that they thought he’d enjoy, while also sticking to my budget.
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The highly anticipated video game industry sales results for September have now been delivered, and many who were expecting a bigger increase over last year’s results, were underwhelmed by the numbers. The industry did return to positive territory after six consecutive months of posting declines, but the increase was a modest 1 percent.
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Video Games | Anita Frazier, Entertainment Industry Analyst Toys & Video Games | 
October 19, 2010 11:42 am | 
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