Game sales, across all categories, appear to be struggling. Consider the video game industry; it continued its decline with NPD announcing that June retail sales were down by 29 percent for game hardware, software and accessories. That is the seventh consecutive month of decline. Xbox sales were off by approximately a third while sales of Wii were down 50%.
The gaming industry has been in decline for a while so those figures were not a particularly big surprise. What was a surprise and a mystery to many was the decline of online gaming sites. Consider Zynga, the creator of popular sites: FarmVille and CityVille. Paying visitors are down and those who follow the company's stock aren’t sure why. A Boston Herald article, “Game maker Zynga stock tanks after weak 2Q report,” puts it this way: “It’s not clear if this means people are growing tired of Zynga’s games, of Facebook games in general, or if they are just not paying as much for virtual cows and poker chips as they used to. Zynga offers its games for free and makes money when players buy those virtual goods to enhance game play. “
Board games sales, at least at Hasbro, continue to struggle as well. According to Bloomberg News in an article entitled, “Soft game sales weigh on Hasbro's 2Q earnings,” Hasbro’s game business was off 8% for the quarter.
So, what’s going on? Here is what I think. The good news is that more and more people are playing games. Board, video, on line and mobile games now make up a spectrum of ways to play. The bad news is that the expanding gaming population, while bigger than ever, is simply not large enough to support all the gaming platforms available. All platforms have their core users but each new generation of players and platforms seems to create a migration that deflates sales in one category while exploding in another.
Right now, it appears that the most likely reason for these declines is that mobile gaming is the hot platform and consumers (particularly younger consumers with good eyes) are taking their time and
dollars to a system that is always with them. That is costing Microsoft, Zynga, Nintendo and Hasbro.
Those of us on the business side of games see these different platforms as somehow divorced from each other; each in its own silo. Those who play games don’t see things that way. They just want to play great games no matter how they are delivered.