Video game sales crash again; industry faces changes

Yet another month has passed with little good news for the video game industry.

Retail video game sales in the United States fell by 25 percent to $755.5 million in October, making it the 11th straight month of year-over-year decline.

Hardware sales fell by 37 percent, and software sales fell by 25 percent, despite the launch of big-name games like NBA 2K13, Resident Evil 6, and Medal of Honor: Warfighter. The only growth category was accessories, whose sales increased by 5 percent year-over-year.

Console gloom?

As always, declining sales bring prognostications of imminent death for game consoles. Those claims, while hyperbolic, do have some truth to them. Game consoles as we know it are changing into broader entertainment devices, with new apps for streaming video and music.

Even Nintendo, a company that's always been about games above all else, is making a big TV push with the Wii U console, which can act as a universal remote, channel guide, and TiVo programmer.

The Wii U may give hardware sales a boost when it launches on November 18. Keep in mind, however, that last November was also a bright spot for the industry, which continued to plunge downward immediately after. Meanwhile, smartphones, tablets and devices like Ouya offer alternatives to traditional gaming and its $60, 20-hour adventures.

The games industry may be in for a better November, with this week's release of Halo 4 for the Xbox 360, and Activision's Call of Duty: Black Ops 2 set to launch on November 13.

The rise of mobile

In fairness, NPD's figures don't tell the whole story. The research firm only counts physical retail sales, which means that downloadable games and content aren't factored in, and neither are app sales on mobile devices.

Borderlands Legends

Publishers are showing greater interest in phones and tablets—2K Games' recent release of Borderlands Legends for iOSis just one recent example—and console makers are warming to downloads as well.

In late September, Sony introduced day-one downloads for blockbuster games like Assassin's Creed III, Dishonored, and Need for Speed: Most Wanted—a first for home video-game consoles. There's also some evidence of a PC gaming resurgence, which is typical as home consoles near the end of their life spans.

Personally, I've played a lot of amazing games lately, both large and small, on consoles, tablets and the PC. While NPD's figures suggest that the industry is suffering, it's hard to square that with how many choices are available to gamers right now.

The industry is going through some big changes, and some of them will be painful—recent game studio layoffs and closures are a recent example—but the good news is that gaming is very much alive.

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