Gamasutra has written an interesting article regarding the decline of the video games industry. It’s well documented that sales of video games and hardware are down 42% from their best showing in 2008. Industry analyst Michael Pachter believes that the people who contributed to the industry’s substantial growth in 2008 simply won’t be coming back to consoles, and have subsequently moved onto iPad and Facebook games.
So the middle of the market has fallen out, and that’s consistent with the flight of the casual gamer that is a common theme among market watchers.
As Wedbush Securities analyst Michael Pachter said to me in a recent email, “casual gamers are never buying consoles again.” If true, that would signal a sea change in the balance of power in the video game industry. No longer would companies like Microsoft and Sony and Nintendo hold the reins of power.
While he and I have had our disagreements, I think I can agree with Pachter that the casual gamers are gone for good — at least from the traditional business model. The industry giants are still largely focused on packaged game software for dedicated game hardware, and that simply does not make sense in the face of ubiquitous mobile devices and web-based free-to-play entertainment.