Game Sales Up and Down

The different segments of the game industry are far from moving in lockstep. Games are selling well... and games are selling poorly. Some games are making a lot of money... others are losing a lot. The latest word from the classic console market (home of the largest publishers like EA and Activision) is that sales are continuing to be awful. As in, down 8% for software sales over last year. It could be worse, though: In the UK sales are down 16% for hardware and software combined (only down 10% for software, but an appalling 32% drop for hardware).

Meanwhile, reported revenue for Zynga was $350 million for the first half of 2010, with more than half of that operating profit. Must be hard to find an open spot to work with all that money piled up in heaps.

In the adventure gaming industry, results are better than the console game sector: Hobby sales continued to grow in Q1. Heck, even comic book sales shot up in May (though it was after a nasty drop in April).

What conclusions can we draw? The economy may be partly to blame for weakness in the console gaming area. But they are under siege by a wave of used game selling (now Walmart's jumping in big time, and 7-11, and more) and free-to-play games and social games. Heck, even DLC that extends the play time of a game helps keep players from shelling out for a new game... it's a double-edged sword (which we all know does more damage). If anything, a weak economy helps lower-cost alternatives do better, so adventure games, used games, social games and the like will all benefit.

What's the best marketing strategy? Stress value; look for ways to offer lower-cost products; tie into licenses and cross-promotions to build market share. And keep your expenses down...