14 DAY TRIAL // The NPD Group, a market research company which watches the video game industry and publishes the monthly charts for the North American hardware and software market, has conducted research that shows that only about 15 percent of consumers are interested in picking up video games and consoles are gifts this year, a clear slow down over the 20% which were prepared to buy them last year.
The firm says that all the top ten gift categories have taken hits this time around, with electronics products like televisions and computers seeing the biggest fall over last year.
The problem for video games is that they had already seen a drop in 2009, to 20 from 22 percent back in 2008, when the economy was still on pretty solid ground.
Video games and consoles are less attractive than clothing, which is preferred by 42%, toys, movies, books, electronics and accessories but is more interesting to customers than food, music and perfumes.
Marshal Cohen, who is the chief industry analyst at the NPD Group, has stated, “Even though the recession is technically over, lingering concerns are keeping consumers in a cautious frame of mind. We are seeing what I call ‘calculated consumption’, and I believe that it is a consumer mind-set that will be around after holiday shopping is over.”
He also says, “Again, this year the real challenge is the absence of newness and excitement. The more progressive brands will learn from mistakes of the recent past and ramp up the excitement in their product offerings. And in turn retailers will be looking for those products to ignite consumers’ passion to spend this holiday.”
The news is pretty bad for the big video game linked companies, who rely on the holiday season to get the biggest revenue of the year.
Microsoft and Sony might have some issues with the launch of the Kinect and the PlayStation Move motion tracking system, which need to sell well to build a customer base.
At the same time big launches like Medal of Honor and Call of Duty might suffer, with Black Ops ending up doing worse than last year's Modern Warfare 2.