Week 2 EOC: Boston Consulting Group - Video Games

Video game sales are down due to the nations recession. people are not buying new video games as much anymore because industry leaders are promoting updates and add-ons that help to enrich older games to keep them up with the times.


"Sales of new videogames, consoles and accessories in U.S. retail stores fell 20% to $515.6 million, down from $647.2 million the same time a year ago, according to survey data from NPD Group."
http://www.marketwatch.com/story/us-videogame-industry-sales-fall-by-one-fifth-2012-09-06

"Sales of Internet-delivered content, micro-transactions and mobile applications amounted to $391 million in sales, while rentals and used-game sales rang in at $104 million."
http://www.marketwatch.com/story/us-videogame-industry-sales-fall-by-one-fifth-2012-09-06

These statistics are a clear indicator that more people are purchasing in-game content or add-ons from sources like "Xbox Live" or "Playstation Network" rather than buying a new game to add to their arsenal. Why buy the new Assassin's Creed when you haven't finished downloading and playing the rest of the old one? In this aspect, gamers can actually wait to buy the "new" games for several months, this means that the $59.99 price tag has, in most cases, dropped significantly and is now a more affordable game. Meanwhile, $20-30 can get you more content for a two year old game than the one that just came out and is twice the price.


Last week, Amazon blamed weak quarterly results from its media business on a decline in videogame sales. "You're seeing an industry slowdown in games and consoles," said Amazon finance chief Tom Szutak in a conference call
This directly supports the fact that consumers are not willing to put out the money to buy a new console when they can stay home and save money by playing the same games they've had or update one of them to make it more interesting. I think a lot of the "plunge" has come from the uprise of apps and smartphone games and media. These apps are now making entertainment and games available on the go without spending a fortune to buy an entirely new platform just to enjoy the experience of a new game environment.