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Don’t count gaming consoles out in 2013

Published Jan 9th, 2013 3:35PM EST
Gaming Console Sales

Gaming consoles had a rough year in 2012 as sales reached 34 million units, a 24.4% decline from 2011. Research firm IDC believes that sales will rebound in 2013 and 2014, however. It is predicted that with the Wii U and the rumored launch of Microsoft’s next-generation Xbox console, consoles sales will increase in 2013 by 10.1% to 37.4 million units. Sales are expected to further increase in 2014 to 44.6 million units, representing growth of 19.1%.

“2011 and 2012 were tough for many console game disc developers and publishers,” said Lewis Ward, research manager of IDC’s Gaming service. “With the advent of eighth-generation consoles, starting with the Wii U, historical norms strongly imply that game disc revenue will stop bleeding in 2013 and rise substantively in 2014.”

Sales generally increase in the years following new hardware. With the newly released Wii U and the rumored launch of next-generation consoles from Sony and Microsoft (MSFT), the console gaming industry will see more success in the years to come. More than ever before, however, hardware makers are facing increased competition from mobile devices, set-top boxes and smart TVs. While some have argued that these will eventually kill gaming consoles, Ward disagrees.

“The console ecosystem is in a state of flux since these platforms need to support an ever-growing array of non-gaming features and services at the same time that game distribution and monetization is moving in a digital direction,” he said. “At the same time, it doesn’t appear that alternative platforms — set-top boxes from cable companies, Web-connected smart TVs, and so on — are positioned to materially disrupt the trajectory of the ‘big 3’ console OEMs in 2013 or 2014. Discs will remain the console game revenue mainstay for years to come.”

IDC previously estimated that gaming consoles would rebound in 2012, however this was not the case.