Advanced E-commerce Research Systems, Inc

Victoria, BC, Canada

In the past year with the economic recession claiming many victims across several industries and demographics, the video gaming industry has preformed robustly. According to recent reports released by NPD and Bloomberg, this has changed. Yesterday, Bloomberg published an article entitled Video Games Fell Most in 9 Years Last Month. Please refer to the following excerpt:

“Sales of hardware, software and accessories in the world’s largest video-game market tumbled 31 percent to $1.17 billion last month, industry researcher NPD Group Inc. said today in a statement. Hardware sales declined 38 percent to $382.6 million. Game software sales slid 29 percent to $625.8 million.

The fourth-straight month of falling sales reflects economic weakness and tough comparisons after revenue more than doubled over three years to $21.3 billion in 2008, driven in part by Nintendo’s Wii system. Sales rose 54 percent to $1.7 billion in June 2008 on sales of new releases “Metal Gear Solid” and “Guitar Hero World Tour.” Sales for the first half of this year tumbled 12 percent.”

It seems that the recession has finally affected the national video gaming industry. Was it only a matter of time or have cash strapped consumers been driven to alternative venues to get their gaming fix? The positive performance of the national second hand market for video games indicates that this is the case. While Nintendo and Microsoft experience declining sales, companies such as GameStop have posted profits on their used video game sales.

“Sales of used games may be hindering purchases of new titles, recent data indicate. Used-game sales reached a record 36 percent of total game purchases in May 2009, according to New York-based Nielsen Co. In May, GameStop reported that used-game purchases in the first quarter had increased 32 percent compared with a 2.8 percent drop for new titles.”

This could very well be true. However, what these analysts omit from their commentary is the dramatic increase for brand new games in alternative markets such as eBay USA. According to Advanced e-commerce data, the quarterly growth rates for traded video games have been increasing in both volume and revenue when compared on a year to year basis. They have been nothing short of spectacular.

It has already been reported here on this blog that Nintendo is no stranger to success in the ecommerce world. In previous holiday seasons, eBay traders have paid premiums of up to $200 for access to a Wii console. For the month of June, Nintendo Wii’s on the eBay platform have seen an increase in 12% of traded volume when compared to that for May 2009.

As unemployment continues to rise and as savings rate continues to increase, it is very likely that this recent flocking to both new and used video games on ecommerce platforms such as eBay will also increase. In the Q2 09/08, the total traded video game volume on eBay has increased by a stunning 39%.

Stay tuned for further updates on online trends in video games sales!