Game Industry Sales Down 34% in Jamuary

Yeah, it's pretty much like that.

Remember how NPD was saying for months last year that sales declines were just a blip, that things would look better in the 4th quarter with all sorts of strong titles being released, and that sales for 2011 would be flat from 2010, maybe down just a smidge? And then the numbers for December hit: down 21% from December 2010, and overall sales for 2011 were down 8%. Time to panic? No, no, everything will be fine in January; this was just lots of sales getting pulled into November, January will be back up.

January sales dropped 34% from January 2011.

OK, time to panic.

That is, if your sales are still all based on shipping boxes to retail stores, you should be wondering how long that will last. Sure, EA and Activision seem to be doing pretty good, selling more boxes than ever... but only of the biggest titles. The midlist is quickly going away, and companies based primarily on less than AAA titles (hello, THQ) are having a very rough time.

Unless they've transitioned to digital distribution, social and especially mobile games. Free-to-play is whacking the business of $60 retail boxes pretty hard, too.

That transition to digital distribution that was going to take many years suddenly doesn't seem so distant. A few more months like January and things will change very fast indeed. I predict that 2012 will see another year of dropping physical retail sales, possibly into the double digits unless the Wii U does amazing business (but it's likely to only have a couple of months of sales in this year).

GameStop better hurry up with those new initiatives into digital.