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Overall Sales Up This Season, But Video Game Industry Stalls

Even though Black Friday sales were up by 13 percent over last year, families worried about the recession are not spending money on new gaming systems.

With video game prices increasing it is becoming harder to buy multiple games or systems, shoppers said. People are not buying the systems like they used to, and the industry is declining, according to sales reports. Sales of gaming systems fell 25 percent this year compared to 2011.

“I took advantage of the deals on Black Friday and Cyber Monday because everything is just so expensive. With this recession I can’t afford to buy electronics like I used to,” said Denise Termunde of Oak Brook.

Despite Nintendo’s release of the Wii-U, sales were not where they were expected to be.  Sony’s PlayStation 3, already available for six years, sold 525,000 following Black Friday. Meanwhile, Microsoft’s Xbox 360, on the market for seven years, sold 750,000 systems. Both outsold the Wii-U. The Wii-U has only sold 400,000 systems for the past week.

People said they are worried about the “fiscal cliff” coming at the end of the year.  The “fiscal cliff” is the end of temporary payroll tax cuts for certain businesses.  For 2013, the tax cuts are expected to end, prompting people to worry that their taxes will go up and they will have less disposable income.

“I bought a used PS3 instead of getting the Wii-U. The system is cheaper, and I can buy many used games.  With the Wii-U, I can only buy new games and new controllers. It was better for me financially,” said Mike Dicostanzo of Willowbrook.

When the PlayStation 3 was initially released, the price of the system was either $499 to $599, depending on storage space.  Now the system costs only $269 and comes with a game, but in order to lower the price the company had to take away memory space and the kind of games it can play.  The PS3 used to be able to play PlayStation and PlayStation 2 games, but now plays games only made for the system.

The prices of these systems and games are not helping the industry either. The Nintendo Wii-U costs $300 – without any games — and includes only one controller.  Games for the system have increased from the Nintendo Wii, which cost $49, up to $60 for the new Wii-U games.

“We are seeing a huge difference between the release of the Wii from six years ago to the release of the Wii-U,” said an employee at the Roosevelt Target store who asked not to be named.  “Sales aren’t where they used to be.  It was impossible to find the Wii anywhere and you were lucky to find one. Now you can come in and pick one up — no problem.”

The unemployment rate in the United States remains at 7.9 percent and people said they are taking jobs for lower pay just to keep a paycheck coming so they can support themselves and their families.

“These have been the hardest few years I have faced,” said Kyle Mrazek of Lombard.  “I lost my job and had to take one that pays less, my wife works two jobs, and we have three kids. Black Friday has been our day for shopping, but we can’t afford to buy them video games and systems like we use to. And when we do, the games are a little bit older, and if we can we go to GameStop. We will try to buy a new game, but if it’s used we will buy that instead.”

One of the most popular features for systems is playing online. The PlayStation 3 offers free online play among other players, while Xbox requires gamers to pay $60 to play online for a year.  This is more money out of a gamer’s pocket, which takes away from buying a new game or system.

People also said the gaming industry is losing much of its audience to tablet and smartphone users. There are many different applications and games people are able to use and buy, which takes up their time and money away from what they may use to buy a game.

Another big competitor with video game sellers is the online company Game Fly.  The company allows people to subscribe to a membership that enables them to rent video games. People can rent two games at a time for a monthly rate of $23 and are offered unlimited access to new or old games.

Game Fly has become more popular to gamers because it allows them to beat the games without having to spend $60 dollars for a brand new game and return it.  This is unlike companies that buy games, such as GameStop, which pays only a small amount for a game.

“I’ve stopped buying games from Target and GameStop because once I beat a game I sell it back, but I don’t get enough back to buy another game. I feel like Game Fly is a better deal unless I’m getting a multiplayer game where I know I’m going to keep the game and play online,” said Tim Gorski of LaGrange.

There is hope for the gaming industry as people await the release of the Xbox 720, which should be released by November 2013. They are also waiting to hear news for a PlayStation 4.

Gorski said, “We need a system to come out that will revive the decline of the gaming industry. I can’t wait to see what Xbox and PlayStation are going to come out with; they have brought gaming to where it is today with online play and graphics. I would never have guessed that this is where we would be today. I’m excited for the future.”

 

Posted by on December 3, 2012. Filed under Community, Editor's Choice. You can follow any responses to this entry through the RSS 2.0. Both comments and pings are currently closed.