While it seemed that the games industry was slowly climbing out of the global financial crisis and a world-wide recession, 2010 reports for games and hardware sales are showing otherwise. New Zealand and North America saw similar game sales declines, whereas Australia witnessed a big slump in both game sales and console hardware:
- U.S. video game sales suffered a decline of 5.7% to $18.6 billion in 2010 with console sales falling 12.5% to $6.3 billion.
- Games sales in Austalia reached $1.7 billion, a huge 16 per cent slide from the corresponding 2009 period. Console hardware sales dropped 27 per cent in 2010.
- New Zealand games sales saw a decline of 7 per cent to $158 million compared to the previous year.
Mario Wynards from New Zealand's Sidhe Interactive weighed in with his thoughts on the games sales slump witnessed in 2010. From Stuff.co.nz...
(Mario) Publishers cancelled a lot of bigger games that would otherwise have been released around now. Part of the challenge with blockbuster games is they cost $30m to $50m and take two or three years to make. Definitely publishers are making fewer big bets.
One of those publishers taking fewer bets is Activision-Blizzard who are planning large-scaled workforce restructuring in the wake of announcing 2011 game cancellations.
While Activision-Blizzard had a enormous year for releases in 2010 with the game titles Starcraft 2, World of Warcraft: Cataclysm, and Call of Duty: Black Ops, the number #1 retail and digital publisher for North America and Europe still suffered a $233m loss during Oct-Dec (the same period that World of Warcraft: Cataclysm and Call of Duty: Black Ops were released).
The company has cancelled the development of True Crime: Hong Kong and the planned 2011 Guitar Hero title, and expects large-scaled layoffs for the studios involved with those games.
With shrinking games sales, publishers uncertainties, and the Australian dollar still at parity with the US dollar, it paints a continuing bleak outlook for the many local games developers that depend on game development contracts.