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Video game sales take a sharp dive in January 2012

Are January's seriously low gaming sales due to a lack of new titles or are consoles out for good?

Financial trends and news by Nathan Pensky
February 10, 2012 | Comments
Short URL: http://vator.tv/n/2452

Don't look now but the traditional gaming console might be in trouble. A new study shows that sales of video games are down sharply in January 2012, as games debuting last month failed to strike gamers' collective fancy.

New research from NPD Research Inc. has found that retail sales of video-game hardware, software and accessories in the US tumbled 34 percent from a year earlier. January 2012 saw sales of $750.6 million in the US in these categories, while in January of the previous year sales were at $1.14  billion, with the sale of such high profile games as "Dead Space 2" and "Little Big Planet 2."

In January of last year, launches of new video games represented 13% of overall gaming sales, but the sales of new video game launches declined 99% this January, according to NPD. Sales from console and handheld gaming devices totaled $356 million in January, falling 38 percent compared to the same period a year earlier.

This isn't to say that there were no launches of new games. However the top 10 selling games of January 2012 was comprised entirely of titles that were released in 2011.

“January retail performance experienced steep declines with a lack of software launches, and poor hardware and accessory performance partly related to bad comps from Kinect-related success in January 2011," said NPD analyst Liam Callahan, in the group's release.

“Outside of new physical retail sales, we estimate that the consumer spend on other ways to acquire content including used games, full game and add-on content downloads, social network games, mobile games, rentals and subscriptions accounted for an additional $350 – $400 million in sales," continued Callahan.

Callahan's statements confirm what many have seen coming for a while now, a gradual shift from traditional console platforms to online and social games. As a sign of the times, 2011 was Nintendo's first non-profitable year in the company's 30 year history. Nintendo showed a staggering $627.9 million loss for the nine-month period ending in December 2011.

To put that in some kind of perspective, the company reported a $638 million gain for the same time period the previous year. Nintendo posted an eight-year low in the Osaka Securities Exchange after its announcement Thursday, dropping as low as 7.8%. The company posted profits of about $631.6 million for the period between October and December 2011, which represents a 61% quarterly drop.

Nintendo attributed its big losses to slower than predicted sales of the Nintendo 3DS, and stiff competition from social networking games and mobile games.

Sad to say, but the old gaming consoles may inevitably go the way of the Dodo, and sooner rather than later.


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