Last month was brutal for the video game industry. Retail-sales tracker NPD Group reports that hardware, software, and accessories sales fell a staggering 34% in January relative to the first month of last year.
Diehard gamers will argue that January lacked meaty releases, but that is typical for this time of year. Developers like to get their more popular titles out in time for the holiday shopping season.
However, let's take a closer look at what's been happening in January since the industry began its slide three years ago. Industry sales fell 4% in January 2011, and that was after a 13% slide in the prior January.
Why aren't developers taking advantage of the January lull? Why aren't holiday hits bleeding into the new year the way they used to?
NPD's data is incomplete. It lacks online retailer and digital downloads. Industry leader Activision Blizzard
This doesn't mean that the business isn't changing. This doesn't mean that the video game industry is healthy.
Three years ago, Activision Blizzard was a three-headed beast with the success of its Call of Duty, Rock Band, and World of Warcraft franchises. Well, Rock Band was unplugged, and World of Warcraft keeps bleeding night elves.
You have to give the gamers credit for now. Activision Blizzard has found a way to keep growing in this climate, even though its stock has been mired largely in the pre-teens since its ill-advised two-for-one stock split four years ago. Even retailer GameStop
It's not just the games that are a problem.
Casual gaming and mobile gaming may be the butts of diehard gamer jokes, but those simple diversions are clearly growing in popularity. They have altered the value proposition of full-blown games, and won over the masses that don't live and die by annual Call of Duty releases.
Traditional video game companies aren't going anywhere, but they do need to get going.
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