The videogaming industry isn't all fun and games.
Sales sank for the fifth consecutive month in July, according to marketing research specialist NPD Group. The metrics are even scarier than the streak, with hardware and software sales suffering a 29% drop year over year.
The biggest losses have come from the sale of the actual consoles and handheld devices that play the games, plummeting a sharp 37% during the month.
The sales slump is a bad break for an industry that had bucked the mainstream malaise by reporting gains during last year's rocky holiday season. The biggest declines these days are coming from the music-based games, which spells bad news for Guitar Hero parent Activision Blizzard (NASDAQ:ATVI) and Viacom's (NYSE:VIA) Rock Band.
Will August be the sixth month in this sorry streak? Electronic Arts (NASDAQ:ERTS) should fare well with this week's debut of Madden 2010, but that franchise hits the market every August.
There are also plenty of potent titles like Activision's Call of Duty: Modern Warfare 2 on tap as we head into the holidays -- but, again, every year finds developers holding on to some of their promising releases until that time of year.
The industry's biggest problem is that the sharper drop in hardware sales telegraphs a weakness beyond any publisher's release slate. Have gamers begun to move on from their consoles? Are free ad-based casual games through Facebook or Apple's (NASDAQ:AAPL) App Store more than enough?
This may be more than a slump. It may be part of a larger trend that will gradually wear away at the business that once thrived in moving $60 games onto $300 consoles.
Sorry, game makers. Even John Madden can't save you now.
Where do you see the future of gaming? Did it peak for keeps? Let us know in the comment box below.
