Sales figures from Microsoft for the 2nd quater of 2012 were released, and the figures are not promising, especially in the wake of a report by the NPD Group that paints a bleak picture for the console industry.  The NPD Group has sales data that is very unsettling for those in the console market.  Sales of games and software dropped 29%, while sales of hardware fell by 45%.  Drops in both hardware and software sales have led many to speculate that the console industry is a dying breed, citing smartphones, tablets, and the rise of apps as a reason for the free-fall.  But are these assertions justified?

Adding more fuel to the fire, Microsoft announced that sales of the Xbox 360 in the most recent quarter were 1.1 million units, a sharp drop from the 1.7 million units the year before over the same time period.  Oddly enough, the number of Xbox live subscriptions increased over this time period by 15%, which shouldn’t be too surprising given the overall install base of the Xbox 360 is greater than it was a year ago.  However, what’s causing the sudden drop in software and hardware sales, and will this trend continue when Sony and Nintendo announce their sales figures soon?

Sales data doesn’t factor in used game sales.

While there is no doubt that the rise of smartphones and mobile applications have taken some dollars and cents from the console market, to make the leap and suggest the console industry will soon fade away into oblivion is a bit rash.  Microsoft has claimed this time period of year is slow for the industry, with many blockbuster titles months away from being released.  Marquee games like Halo 4 won’t be released until the end of the year, perhaps accounting for some of the sales stagnation.  Moreover, with the next-generation consoles on their way, it’s reasonable to suggest that many fans are saving their cash for the Xbox 720.

How do you feel about the video game console market as a whole?  Are you waiting for games that are coming out in the fall / holidays, or even the next-generation consoles?  Let us know in the comments!



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