The video game industry is still in a funk.
Industry watcher NPD Group reported August metrics last night. It wasn't pretty. Stateside sales fell 10% through the distribution channels that NPD tracks. Hardware took a 5% slip, while software companies went in for a 14% haircut.
The news is uglier than you think. Sales fell 16% last August, so we're looking at a 24% slide in two years. I've been warning about the industry's shortcomings for a while, and I just don't see crow in my diet in the near term.
There were a few upbeat signs earlier this month. Take-Two Interactive
Buzz still exists over popular releases. Activision Blizzard
Unfortunately, there's just not a whole lot of traction outside of the tent pole titles.
It's just flat out telling that Call of Duty: Modern Warfare 2 was one of last month's 10 best-sellers, even though the battle game has been out since last November. Heck, a few of the charting titles are as old as Super Mario games.
The biggest weakness, naturally, is coming from the handheld systems. PSP and DS systems and games aren't as attractive now that Apple's
A year ago, gamers argued that it was the recession slowing sales. How dare I suggest that Facebook and Apple's App Store eat into the appetite for rich console experiences? Well, it's happening. Die-hard gamers may still be spending as much as they used to on hot titles, but casual players -- who apparently are more important to the industry than expected -- appear perfectly fine to be pitting plants against zombies on their iPhones and iPod Touch devices or fertilizing crops on Facebook.
Is it sad that the industry peaked in the 2008 era of fake plastic guitars, or will the new wave of motion-based controllers breathe new life into the industry? Until sales metrics pick up, I'll have to go with my fake plastic guitar gently weeping.
What will it take to get the industry back on its feet? Will David Gardner need to put out a Motley Fool video game where individual investors fend off unscrupulous brokers and talking heads spouting bad advice? Share your rescue plan in the comment box below.
Microsoft is a Motley Fool Inside Value selection. Take-Two Interactive Software is a Motley Fool Rule Breakers recommendation. Apple, Activision Blizzard, and Electronic Arts are Motley Fool Stock Advisor selections. Motley Fool Options has recommended a synthetic long position on Activision Blizzard. Motley Fool Options has recommended writing covered calls on GameStop. Motley Fool Options has recommended a diagonal call position on Microsoft. The Fool owns shares of Activision Blizzard and Microsoft. Try any of our Foolish newsletter services free for 30 days. True to its name, The Motley Fool is made up of a motley assortment of writers and analysts, each with a unique perspective; sometimes we agree, sometimes we disagree, but we all believe in the power of learning from each other through our Foolish community.
Longtime Fool contributor Rick Munarriz will admit to still playing video games, though finding time is the rub. He does not own shares in any of the companies in this story. He is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. The Fool has a disclosure policy.