From The Sip Trunking Experts

TMCNet:  Video game sales down, but why? [St. Joseph News-Press (MO)]

[December 06, 2012]

Video game sales down, but why? [St. Joseph News-Press (MO)]

(St. Joseph News-Press (MO) Via Acquire Media NewsEdge) If Nintendo brought about the Silver Age of Gaming in the mid- 1980s, it appeared the Golden Age of Gaming was kicking off in 2010.

Two years ago, video game creators were declaring their medium the next great art form. Titles like "Uncharted 2,' "L.A. Noire,' "God of War 3' and "Heavy Rain' were matching the drama and visual spectacle of blockbuster movies and also were captivating gamers all over the world with their interactivity.

The surging potential of the video game business was met with surging sales. More than 200 million Wii, Xbox 360 and PlayStation 3 systems had been sold worldwide. Sales of portable gaming devices like the PSP and Nintendo DS were up as well. More than 12 million subscribers were paying $15 a month to play Blizzard Entertainment's online game "World of Warcraft,' and Blizzard's competitors were developing worthy rivals. Following in the footsteps of the Wii, Microsoft's motion-sensing Kinect system was generating tons of buzz in 2011 by promising to free players from buttons with controllers.

Today, however, the video game giants find themselves in financial peril.

Through September of this year, retail sales of video games plummeted 20 percent in the U.S. This comes on the heels of a lackluster performance in 2011, when sales fell 8 percent. Not to mention, this was the year that the monthly $15 subscription for major online games became obsolete. Most business analysts predict that 2012 will be the worst year for retail video game software and hardware sales since 2005 or 2006.

The struggling economy certainly has been a factor in the decline, especially considering that young men " the core audience for video games " were hit so hard during the recession. But there's more to this gaming decline than a lagging workforce, says C.J. Strike, social media manager for and former editor of He attributes the current downfall to a lack of console innovation. It has been more than seven years since Microsoft released the Xbox 360 and more than six since Sony put the PlayStation 3 on the shelves.

The wait for something new has been too long, he argues.

"The current hardware is still selling, but gamers want the next big thing,' Mr. Strike says. "They see PC games now that look magnitudes better than what's on consoles and they want that experience.' Nintendo finally closed the wide gap between console releases last month with the release of the Wii U. The Wii U is the first Nintendo console to support high-definition graphics, and it's the first console to utilize the GamePad, a controller that features an embedded touchscreen. The touchscreen is used to supplement the main gameplay shown on the television or, with some games, it allows the player to continue playing games when the television is off.

Anchored by these new features, the Wii U already has sold approximately 440,000 units in the U.S. and more than 1.2 million total around the globe (as of Dec. 3). That might sound like a lot, but the number is actually quite underwhelming. Consider this: The Xbox 360 radically outsold the Wii U in North America on the week of Black Friday. About 750,000 Xbox 360 consoles sold that week compared to only 400,000 Wii U systems. Even with those additional 750,000 units sold, Xbox 360 sales are down by a third this year (while PS3 sales are down by a quarter) according to Bloomberg's video game business analyst Doug Creutz.

Mr. Strike says the Wii U doesn't have the bells and whistles gamers have desired from a new console, and its sales might struggle because of it.

"The lack of new hardware has hurt a lot, and I don't think the Wii U is the hardware gamers were looking for to get rid of that feeling,' he says. "It is using only slightly better internals than the 360 and PS3.' Mr. Strike expects the gaming business to continue to suffer until the new Xbox and PlayStation consoles are released in the fall of 2013. These new systems certainly will boast many more features than the Wii U, he says.

"They will drum up hype and get those who had let their collection sit back on board and buying games,' Mr. Strike says.

However, Stephen Toltilo, editor-in-chief for the gaming website, isn't so sure. For, you see, there is another reason that the major video game companies have been struggling since 2010.

"Big companies no longer dominate the creation of video games,' Mr. Toltilo says. "Free-thinking, independent creators are on the rise, and they're making some fascinating games.' This development will sound familiar to anyone whose CD collection is only collecting dust these days. Less expensive digital downloads are disrupting the video game business model. Nearly everywhere, it seems, people have been sharing "Words With Friends,' hurling "Angry Birds' at pigs or raising crops in "FarmVille.' All of those games, made for smart phones and tablets, are popular and can be purchased for pennies. This factor has really hurt the sales of handheld gaming devices.

"Kids are getting iPads instead of the Nintendo 3DS and the PS Vita,' Mr. Strike says.

These cheap smart phone and tablet games have damaged sales of new Xbox, Wii and PlayStation games. Few want to pay $60 for a new video game disc anymore, Mr. Toltilo points out.

The numbers are on his side. Mr. Kreutz says that seven non- sports games sold more than four million units in North America and Europe in the fall of 2011. This fall, he is predicting only four ("Borderlands 2,' "Assassin's Creed 3,' "Halo 4,' and "Call of Duty: Black Ops 2') will reach that mark.

It was 29 years ago that Atari buried millions of unsold video games in a New Mexico landfill. The video game industry barely survived the brutal recession of the early 1980s, and many are wondering if the gaming giants can climb out of this one. But a lot can be done, Mr. Toltilo says, with a little imagination and consideration.

"We can only weep for corporations so much' he says. "... The play's the thing. All else is second.' (c) 2012 ProQuest Information and Learning Company; All Rights Reserved.

[ Back To SIP Trunking Home's Homepage ]

Subscribe here for your FREE
SIP TRUNKING enewslettter.

Featured Partner

Featured Whitepapers

SIP Security for the Enterprise
Voice over IP (VoIP) is incorporated into a variety of computer networks, both public and private, and used for everyday transactions and communications among carriers, businesses, government agencies...

Making A Broadband Purchase Decision
Businesses today have many options for broadband connectivity. Clarifying your particular business needs prior to selecting a broadband provider will ensure an optimal match of broadband service to your requirements.

Voice-Optimized Network Delivers Premier Call Experience
Customers equate call quality with business quality. Real-time communication, interpersonal interaction, and the cordial tone of a call center representative can create a positive impression of your business that no email can match.

Featured Case Studies

Business Telecom Expenses Reduced 50%
A small to medium sized company in the midwest was interested in migrating to IP Communications, but in today's economy, they were hesitant to upgrade their communication system due to their perception that the cost would outweigh the benefits.

Multi-State Company Cuts Telecom Costs 50%
A multi-site, multi-state company with extensive monthly long distance fees and toll-free charges did not have adequate broadband for Broadvox SIP Trunking requirements, nor did they have a SIP enabled telephone system.

Discover Leisure Connects Remote Users to its IP-PBX
Discover Leisure is one of the largest resellers of caravans and motor homes in the UK. With 15 branch of?ces all over the country, the company spent a great deal of money every month just on internal phone calls.

Featured eBOOKS

Internet+: The Way Toward Global Unified Communication
Connecting the telephony of the enterprise PBX or Unified Communications (UC) system using SIP trunks instead of conventional telephone lines has been very successful in recent years.

What is SIP Trunking? Edition 2
SIP trunking is becoming more of a focus for service providers. One key issue many service providers face when deploying SIP trunks is NAT, or Network Address Translation, traversal.

What is SIP Trunking? Edition 1
A vast resource for information about all things SIP - including SIP, security, VoIP, SIP trunking and Unified Communications.

Featured Videos

Broadvox VAR Testimonial VAR 1:
Part 1 of the VAR (Value Added Reseller) Partner Program Testimonials for Broadvox...

E-SBCs AS The Demarcation Point:
Ingate's Steve Johnson talks to Erik Linask about the role session border controller plays as the demarcation point at...

Demystifying DPI
How can deep packet inspection protect your SIP traffic as well as your entire network?

Featured Resources

Partner Program Overview:
Over 4,000 VARs, Master Agents, Solution Providers, and Independent IT Professionals trust Broadvox. We offer customized services and solutions to fit seamlessly into any company's business model. And when you partner with Broadvox, every member of our team stands behind you and your customers 100%...

SIP Trunk UC Summit

What's New

Presenting the New Ingate/Intertex Website:
Internet+ is an extended Internet access allowing high quality SIP (Session Initiation Protocol) based real-time person-to-person communication, everywhere and for any application. It applies to both fixed and mobile networks ...

Featured Blogs

Featured Webinars

Secure SIP Trunking:
What You Need to Know

Successfully Deploying Enterprise SIP Trunking:
Tools and Techniques for Overcoming Common Roadblocks

Featured Podcasts

Getting the Most Out of Your SIP Trunks:
Ingate's Steve Johnson and TMC's Erik Linask discuss how best practices forgetting the most out of SIP Trunking services and common pitfalls to avoid.

Featured Datasheets

Ingate SIParator E-SBCs
Adopting SIP is a simple process with the Ingate SIParator, the secure enterprise session border controller (E-SBC). The SIParator makes secure SIP communications - including VoIP,SIP trunking and more - possible while working seamlessly with your existing network firewall.

Ingate Firewalls
Everyone is talking about enterprise usage of VoIP, instant messaging and other types of realtime communications including presence and conferencing.

SIP Trunk Solutions for Service Providers
The award-winning Ingate Firewall and Ingate SIParator deliver a high quality, reliable SIP trunk connection between the customer's IP-PBX and the service provider network, and solve interoperability issues to simplify deployments and support for remote diagnosis of reported issues.