NPD: growth in non-console gaming kept video game industry from sinking

According to estimates from market research organization NPD Group, U.S. consumers spent between $15.4 and $15.6 billion on video games of all types, including boxed software, used games, rentals, subscriptions, downloads, apps, and ad monetized freeware, and in-game microtransactions.

Overall, consumer spending on video games was flat between 2009 and 2010, but the industry underwent a slight shift in where the money was being channeled, and that looks to have actually prevented the industry from posting an overall decline for 2010.

NPD found that the sales of both consoles and new physical games were down overall, but that sales of used games, full-game digital downloads and downloadable content, mobile gaming apps, and social network gaming buoyed their decline.

Distimo, a company that tracks app store sales, recently released a report on the app store trade in 2010 which showed that not only had the sale of apps increased 30% year over year, but also the revenue generated by in-app purchases more than doubled last year in the most commonly purchased iPhone and iPad games.

While the immediate availability, low cost, and relatively quick acquisition of mobile games encourage users to buy new titles more often, the quick development of mobile operating systems and hardware is also a major driver of its growth.

"In terms of consoles, we are passing the five-year mark since any new hardware was released, and people are getting bored," said Dave Castelnuovo, founder of Bolt Creative, the software company behind the popular iOS game Pocket God. "I think the 'big three' [Nintendo, Sony, Microsoft] have an antiquated method of releasing new hardware. They come out with new hardware every five years (10 years for this generation). Toward the end of the cycle, users get bored; at the start of the new cycle, there is a lot of interest, but the user base starts off at zero again. How can they compete with Apple coming out with a new, must-have version of the iPhone and iPad every year which just keeps building on top of their audience?"