For the last few months, the gaming industry has seemed to be almost recession proof. Aside from a minor drop in March, the success of the Wii console and the DS/DSi have managed to keep profits up for Nintendo. The recession has actually been a boon to the industry in some ways. MMORPGs and other online games are, dollar for dollar, a better budget entertainment option than going to the movies.
Today, however, it seems the times have finally caught up with gaming. The NPD Group has just released a study that shows us a gaming industry in near freefall. Year over year U.S sales in June are down 29%, and console sales dropped 38% over the same period. Even Nintendo is feeling the sting, as Wii sales slow more and more the further we get from E3.
So what does this downturn mean for you, the humble gamer? Only good things. A steep dive in console sales is going to make manufacturers drop prices to stimulate purchases and improve peripheral sales. I think we'll also see a sharp increase in the number of manufacturers that take to selling their products primarily online. Cutting shipping, packaging, and distribution out of the loop and just selling direct downloads will cut down a lot on overhead.
Whatever they do though, the industry will probably continue to post losses for a while yet. It's going to take a major shift, like a new console or peripheral that catches on, in order to lift gaming out of this slump. The obvious culprit for such a revival is Project Natal. But will Microsoft's next big thing really sell well enough to invigorate the industry?
In a word, yes. Project Natal represents a fundamental shift in the way we game. Using your full body as a controller opens up whole new avenues for gaming, and will allow video games to merge with the television and film industry in a lot of ways. The first director to create an interactive movie is going to light a fire in the entertainment industry, one that could very well spread to other sectors of society.