The one segment of consumer entertainment that analysts believed would be recession-proof is proving otherwise. Sales for the video-game industry plunged to a nine-year low for June, according to NPD Group.
Last month both hardware and software game sales dropped a whopping 31 percent to $1.2 billion from $1.7 billion the same month in 2008, according to the report. June’s decrease marks the fourth consecutive month of year-over-year declines.
The huge decrease is the greatest monthly year-over-year decline since September 2000, when the industry suffered a 41 percent drop.
Some Play for Free
In recent interviews with us, NPD analyst Anita Frazier had said the video-game segment would do well in the recession because it’s one area in which consumers are willing to spend during an economic downturn. Now she has a different view.
“This is one of the first months where I think the impact of the economy is clearly reflected in the sales numbers,” Frazier wrote in her analysis. “While the aggregate of content may not be as strong as what we saw in the first half of last year, and while the consumer base willing to spend dollars on hardware at the current price points may be thinning, the size of the decline could also point to consumers deferring limited discretionary spending until a big event (must-have new title, hardware price cut) compels them to spend.”
Could consumers’ lack of interest be the answer? No, as four million new players have joined the video-gaming market since last year, according to Frazier.
While some of those players are retail consumers, others are not purchasing games and instead are playing online for free.
Video-game software sales took a smaller hit in June, falling 29 percent from $876 million to $626 million.
While Nintendo took the top two slots for its DS and Wii…