Everything seems to be taking an economic hit these days and the latest loser is U.S. video game sales.

Should this be too much of a surprise? According to industry experts it should not. They tell us that the reason for the decline vs. last year is due to “a tough comparison from a year ago” when highly anticipated deep content games like “Grand Theft Auto 4″ and “Mario Kart” were released.

h1198Personally, I think the market has been over-saturated with users. If so, growth in the future will be more dependent on deeper penetration with current gamers than with expanding the market to new non-gamers.

While Wii still is the largest seller of consoles in the US, its growth has slowed considerably. This is just another indication of a change in the tenor of purchasers. In these tough times, consumers are making choices about what they need vs. what they want, and so the purchases of new consoles and new games are therefore slowing.

wii

In real terms, discretionary income has not diminished all that much. What has changed is the way we spend that cash. To those brands that develop in the psyche of what drives purchase decisions beyond just talking about new and better, there is opportunity on the horizon. However, if you play the same old marketing game, as SONY demonstrated in its earnings last week, the future is not all that bright.

Because consumers are demanding flexibility, non-compatible formats seem inefficient and cause customers to choose from what seems to be an artificial barrier. Sales skyrocketed when Apple switched to the Intel processor that enabled Windows users to run their favorite OS natively on a Mac. The same dynamic will drive the next big winner in gaming. There simply is not room in this economy for competing platforms. Look what happened to HD DVD and Blu-ray

Therefore, it would behoove the gaming industry to follow a few easy rules in this new economy:

  1. Simple is better
  2. Compatibility is preferred
  3. and the consumer is definitely in charge