I once thought video gaming, as an industry, was impenetrable. Economically the industry has been hugely successful, especially with the rise of social gaming and such, but I'm saddened to say that profits for the business have gone down for the second straight year. Even with the highest-selling game of all time, sales of new games in 2010 dropped 6%. This figure is not as significant as what has been seen with other industries, but with a dedicated fanbase of this medium, this is surprising. A few sales records were set in 2011 and yet the profit earned by the entire industry still went down. Notable records broken were Black Ops becoming the highest-selling video game of all time and also having the biggest entertainment launch in history, and WoW: Cataclysm became the highest-selling PC title of all time. The 360 was the only console to enjoy higher year-over-year sales, so congratulations Microsoft. Your console actually made money for once.
Such a trend can obviously be attributed to how terrible some economies are still, even two years after the disaster. The casual audience is unwilling to spend money on games because they fear the worst, and no one can blame them for that - but if they are the sole reason, then this newfound audience is a lot bigger than I thought. For the last three years, both the Wii and popular interactive franchises like Rock Band have given the industry a major boost. But with sales tanking for both and the Wii losing its appeal, even the massive sales of Kinect couldn't stop the year-over-year deficit.
2010 was also a somewhat disappointing year for new game releases. Don't get me wrong, there was some amazing games this year - Red Dead, AC: Brotherhood, Mass Effect 2, Super Mario Galaxy 2 to name a few - but compared to past years, 2010 had only a select few high-profile releases. The Pach-Attack (Michael Pachter of Wedbush Securities and seen on Gametrailers.com) attributed this to the slump also.
In 2011, however, analysts are expecting profits to go up again. Even in the first four months of this year, the gaming industry should see a turnaround. Portal 2, Dead Space 2, LittleBigPlanet 2, Mass Effect 2 on PS3, Marvel vs Capcom 3, Killzone 3, Bulletstorm, Pokemon Black and White, Dragon Age II, Homefront, Crysis 2 and Brink. That's a stellar lineup (with only three of those not being sequels, which I find hilarious) and I'll definitely be wasting money on one or two. So please, all go out and buy a new game ASAP or wait for these great games scheduled to come out soon. We need to help support the industry (or any studio that doesn't have an affiliation with Activision)!