How Do Video-Game Makers Survive in the Apple Era?


The past two years have been brutal on the video game industry. Traditional video game powers Activision-Blizzard, Electronic Arts, and Gamestop have all been trounced by the market. It has been even worse for console makers, with Nintendo down 57% and Sony down 53% during that time frame. Console sales are drying up as spending shifts to more casual games.

In the video below, Motley Fool senior technology analyst Eric Bleeker talks about research from NPD that shows video game software, hardware, and accessory sales were down 28% in May. The natural thought is that video games are dying. However, there's an interesting wrinkle in the study: that May figure is only for traditional sales channels like retail, and doesn't include mobile and digital spending.

Morever, Eric applauds moves by giants EA and Activision to trim their gaming lineups. That's a needed move for an industry undergoing huge shifts. In the end, the old rules of video games will likely not apply in this new age. While Mario was a dominant cultural figure and game seller for decades, its unlikely Angry Birds will still rule the roost in 2032.

That means even if innovations like Internet-enabled televisions from Apple help further spread gaming into the living room and grow the industry, the profits will likely be distributed within a broader group of companies rather than concentrated in large public companies investors can buy. To see Eric's full thoughts on NPD's May results and the video game industry, watch the video below.

If you're looking for a way to profit from the spread of mobile games, The Motley Fool has just released a free report on mobile named "The Next Trillion-Dollar Revolution," which details a hidden component play inside mobile phones that also is a leader in the exploding Chinese market. By buying a player inside smartphones, you can profit, as mobile gaming helps fuel their growth. Inside the report, we not only describe why the mobile revolution will dwarf any other technology revolution seen before it, but we also name the company at the forefront of the trend. Hundreds of thousands have requested previous reports, and you can access this new report today by clicking here -- it's free.

At the time thisarticle was published Eric Bleeker has no positions in the stocks mentioned above. The Motley Fool owns shares of Apple, Activision Blizzard, and GameStop. Motley Fool newsletter services recommend Activision Blizzard and Apple. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Copyright © 1995 - 2012 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.