Consumer spending on the U.S. gaming industry was up slightly in the second quarter, research firm NPD reported today.
During the second quarter, U.S. consumers spent a total of $4.5 billion on gaming hardware, content, and accessories, representing a 1 percent gain over the second quarter of 2010. However, sequentially, things didn't go too well for the industry. In the first quarter of 2011, total consumer spending on video game hardware, content, and accessories hit $5.9 billion.
In the second quarter, total U.S. spending on physical game software for consoles, portables, and PCs, hit $1.44 billion, NPD said today. Total consumer spending on used games, game rentals, subscriptions, digital games, and mobile titles hit $1.74 billion. The remainder was spent on gaming hardware.
Once again, those figures trailed first-quarter data. NPD said in July that physical software sales hit $2.03 billion in the first quarter, and sales of used games and digital content, among the other products, reached $1.85 billion.
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The gaming industry's downturn is due to relatively sluggish demand for both hardware and software. On the hardware front, Nintendo's 3DS portable, which was supposed to bolster hardware sales, has proven to be a disappointment at retail. During the second quarter, Nintendo sold just 110,000 3DS units in the U.S.
For much of the second quarter, software releases have also disappointed customers. And it wasn't until close to the end of the second quarter that two major games--Madden NFL 12 and Gears of War 3--finally hit store shelves. What's more, the most anticipated games of the year, Battlefield 3 and Call of Duty: Modern Warfare 3, are slated for release this month and next month, respectively.
But even with those big launches and an expectation of higher spending in the fourth quarter, thanks to the holidays, a reprieve from tough months doesn't appear to be in sight, according to NPD analyst Michael Pachter. Writing in a note to investors earlier this week, Pachter said that "sustained" growth in the software space, especially, won't occur until next year.
"We continue to believe that sustained software sales growth will remain elusive until hardware sales rebound for an extended period of time," Pachter wrote. "A sustained rebound is unlikely to happen until Microsoft cuts the price of the Xbox 360, and we don't expect a cut until early 2012."