Gaming on Smartphones and Tablet PCs Cannibalizes Videogame Industry

The videogame industry has to work hard to capture customer's attention as fickle consumers turn to cheaper games available for smartphones, tablets and popular websites such as Facebook. New game sales dropped 15% to $790.9 million from $928.3 million the same time last year, as Wall Street Journal reports on April 16. (http://online.wsj.com/article/SB10001424052748704495004576264840677078146.html)

However Nintendo Co. and Sony Corp. posted strong stales of their newest videogame hardware, despite weakness in overall U.S. videogame sales in March. Those results stood in contrast to the overall market, in which sales of new videogame hardware, software and accessories in the U.S. fell 4% from the same period last year. New videogame hardware sales jumped 12% to $494.5 million from $440.6 million a year earlier, bolstered by sales of Nintendo's 3DS. The $249.99 device, which can display 3-D images without the need for specialized viewing glasses, went on sale in Japan in February.

Sales of videogame accessories such as prepaid cards used to purchase digital content within games, rose 13% from the year before. The continued strong sales of videogame accessories underscores the growing importance of digital content. Separately, Sony said it has sold more than 8 million of theMove controllers which went on sale in September of last year. The Move is a wand-shaped device with built-in motion sensors, for its PlayStation 3 console. Sony said sales were seeing "strong momentum." Microsoft Corp. said last month it had shipped 10 million of its Kinect motion-sensors for its Xbox 360 console, which went on sale in November.


The implication

As the sales in the overall market of videogame hardware, software and accessories in the U.S. fell, the sales of videogame hardware and accessories buck the downward trend to continue to grow. The implication can be explained as that the ever-evolving gaming contents have started moving to the newer platform on the smartphone and tablet PC, so the sales of videogames on the videogame hardware decreases. On the other hand, the motion sensing and 3D display/interaction technology will enable the hardware makers to entice the gamers to upgrade their gears with newer hardware and accessories.

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