Console Market Shrinks, Social/Mobile Gains

Total spent on games in the US in 2010: $24.7 billion.

This study just released  by Newzoo has some very interesting data. They show the overall money spent by US consumers on  games to ring in at $24.7 billion, just 2% less than 2009. (Yes, I realize this isn't counting paper games... but that category is going to amount to just a percentage point or two on this scale.) Console game sales dropped 29%, which accounts for the grim faces of the major console publishers. Still, it's not as if those gamers just disappeared; they just started spending their money on other types of games. Yes, boxed retail PC games dropped, but every other category grew... and substantially.

Social games grew the most, by 66%, followed closely by PC downloadable content at 60%. (That must account for why League of Legends publisher Riot is looking to hire 100 people.) Mobile games grew 46% (note that the numbers for DS and PSP are counted under consoles, not mobile devices.) Growing 46% is a lot of smurfberries in one year.

The interesting lesson here is that yes indeedy, gamers will get their groove on in different ways. Console gamers are getting more picky about spending money on console games when they see interesting choices appearing on their PC, on Facebook or on their smartphone. All of those things are direct threats that the console game publishers need to deal with.

Some publishers are pushing into those spaces through acquisition; some are building their own titles or working with partners to get some traction in these new areas. Unfortunately, some are insisting that everything's fine with their current business model. If you're not concerned about the future of the gaming industry, you're not paying attention. Games aren't going away, but how consumers spend money on them is certainly changing. Design and marketing need to follow that money.

One thing marketers should think about: Social games can take advantage of a mobile client, and mobile games should have a social component (at least to their marketing through social media).