It probably is following the last year’s long-awaited introduction of the Xbox One and PlayStation 4 consoles — and growing interest in downloaded games — researchers at The NPD Group conclude in a new report on 2013 Games Market Dynamics: U.S. The firm says that total spending on video game content increased 1% to $15.39B. Consumers paid $7.22B for downloaded games, and $1.83B for used and rentals. That more than compensated for the 11% drop, to $6.34B, in sales of new physical video games for consoles and PCs. Hardware sales were up 5% — NPD doesn’t provide a dollar number — resulting in a 2% increase in spending for hardware and software combined. Consumer outlays for hardware and software fell in 2012 and 2011, NPD said. But with Microsoft and Sony offering next-gen devices to follow Nintendo’s Wii U in 2012, it’s “a positive indicator for future market growth as we enter the first full year with all three new consoles on the market,” NPD analyst Liam Callahan says. He’s impressed by research showing that 36% of people 13 and over played downloaded games. Teens and young adults are the biggest market, of course, but “there is no particular point after age 25 where incidence declines significantly.” (Really? Not even among people over 70?)
Wedbush analyst Michael Pachter also is upbeat about video games in a 170-page report on the industry out today. He forecasts $7.3B in sales of physical games in 2014. That’s still way below the $13.6B peak in 2008, and is “only a fraction of the level of movie box office, rentals and sales” — estimated at $27B last year. But it indicates that “there is significant potential for future growth.” He adds that game makers should see “a significant revenue contribution from sales of digital content over the next several years” not including subscriptions, a model that he says “is outdated and destined to see declining revenue.”
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