Game players put spending on pause
(but they spent BILLION$, If Microsoft only places third place in consoles it could be worth BILLION$)
Video game sales declined in 2000 for the first time ever as gamers held on to their wallets--waiting for new consoles and software.
By Khanh T.L. Tran, WSJ Interactive Edition
January 16, 2001 5:32 AM PT
The U.S. video-game industry saw its first drop in sales in 2000 after five years of explosive growth, as generally slower economic growth, not enough PlayStation 2 machines and a wait-and-see attitude from consumers anticipating new game machines curbed demand.
According to a study to be released Wednesday by NPD Group Inc., a market-research firm in Port Washington, N.Y., sales of video-game machines, software and accessories such as joysticks fell 5.8% to $6.5 billion in 2000 from $6.9 billion in 1999. Sales of consoles, including the older PlayStation machine, Dreamcast and Nintendo 64, declined more than 21% to $1.1 billion from $1.4 billion in 1999, as the number of units sold decreased to 8.2 million from 11.8 million.
Sales of game software fell to $4.09 billion in 2000, down 2.6% from $4.2 billion a year earlier.
"We were hoping to see another all-time high," said Richard Ow, senior account manager at NPD. Ow blamed the decline primarily on the fact that 2000 was a period of transition for the video-game industry: Some manufacturers were phasing out their older machines to make room for more advanced models.
On a unit basis, which factors in any price cuts by manufacturers on older machines that are facing new rivals, the industry appears healthy. NPD said that counting each machine, game and accessory as one unit, the number of total units sold grew to 191.4 million from 188.6 million. NPD also said that sales of computer games grew nearly 7% to $1.6 billion in 2000 from $1.5 billion in 1999.
One explanation for the decline in total sales in the video-game industry is that potential buyers, aware that new systems soon would be coming out, held onto their wallets to buy the new machines, Ow said. This fall will mark the debut of Nintendo's (Nasdaq: NTDOY) Gamecube video-game machines and Game Boy Advance handheld players, as well as the release of Microsoft's (Nasdaq: MSFT) Xbox consoles.
continued... zdnet.com |
