Game Sales 2010: Old Market Down, New Market Up

The numbers are in, having been smuggled past NPD's new Iron Pay Wall. It's the best of times, and the worst of times. Game sales are up, game sales are down, game sales are flat all around. It's a complicated picture, and it's best understood by breaking it down into the component numbers.

First off, let's look at the traditional market: physical video games and hardware sold in retail stores. Total sales in the physical channel fell 9% to $5.06 billion in December, bringing the total for 2010 to $18.58 billion, representing a 6% drop. Remember, that's from 2009 numbers, which were already down over the previous year. And that's after a big boost to the numbers from the introduction of Kinect and Move, expensive peripherals that sold in the millions. When you just look at the software, the picture is hardly better: U.S. retail game sales, including portable, console and PC game software, generated revenues of $10.1 billion, a 5% decline over the $10.6 billion generated in 2010.


Meanwhile, increased sales of used games, digital downloads, mobile and social games were up, enough to bring game sales overall to about the level of 2009, at $15.5 billion. That number's only approximate, because NPD is unable to track those categories with precision. I'm not sure how they generate those numbers, since much of that activity is not released by the private companies involved. Maybe they read the entrails of goats, or possibly throw darts.


The key things here are that game sales are shrinking still in the traditional markets, and growing enough in the new markets to offset that. Gamers are shifting their dollars. Publishers had better follow them, or risk getting left behind.