American Consumers Spent $2.88 Billion on Video Game Content in Q2

Hawken Video Game

Although retail sales of games have slumped, more gamers are spending money on digital games, rentals and used games.

Traditional boxed retail sales of video games have been down throughout 2012, including a 29 percent dip in sales in June 2012 with $699.8 million generated according to The NPD Group. But a new report from that research firm, Q2 2012 Games Market Dynamics: U.S., shows new revenue streams are bolstering revenue for retailers and game makers alike.

PHOTOS: Film and TV Actors Who've Starred in Video Games

In addition to the $1 billion spent in the U.S. by consumers on new physical video games and PC games in the second quarter of 2012 (April – June), the total consumer spend on other physical forms of content (used and rental) reached $386 million, and content in digital format (full game and add-on content downloads, subscriptions, mobile games and social network games) generated $1.47 billion.

“In the second quarter of this year, sales of content in a digital format have grown 17 percent over Q2 2011," said Anita Frazier, industry analyst, The NPD Group. “While this growth is in stark contrast to the declines in new physical software and hardware sales, the size of digital sales is not quite large enough to offset these declines, leading to an overall drop in consumer spending in Q2 by 16 percent.”

Similar research in the UK, France and Germany shows that the consumer spend on other forms of physical games content outside of new physical retail sales totaled $243 million (used and rental) while digital format sales in those three countries (full game and add-on content downloads, subscriptions, mobile games and social network games) generated an additional $983 million in sales during Q2 2012.

“While many European acquisition trends in the second quarter of 2012 mirrored those we saw in the U.S. due to seasonality, Europe differed from the U.S. in terms of softer mobile spending, but greater stability in rental trends.  Growth in full-game and add-on content downloads in the second quarter is surprisingly similar as the content behind this increase is suitable to both markets.”

VIDEO: Jay-Z Enlists Kanye West, Daft Punk, Coldplay for NBA Video Game Soundtrack

The estimates are published in NPD’s report, Games Market Dynamics:  U.S. (formerly known as the Games Industry:  Total Consumer Spend) –released by The NPD Group in August 2012 - and are derived leveraging NPD’s portfolio of physical POS tracking (Retail Tracking Service) and consumer research including the Games Acquisition Monitor, Video Game and PC Game Subscriptions Report and Consumer Tracking Service. It also incorporates consumer spend estimation provided by NPD retail and publisher partners, and calibration with third-party sources. Estimates for the three European countries are published in NPD’s report, Games Market Dynamics: Europe, which utilizes like methodology to the U.S. service across the areas of consumer spend that are outside of new physical retail sales.