Report: Video Game Expected To Recover Next Year

Recent research reveals consumer spending on video games is down from last year but could make a recovery in 2012.

The research comes from Newzoo, which is a games market research specialist, and says sales on video games will come it a $21.6 billion in the US this year. This is down from last year but only slightly. However, the research firm expects a strong recovery next year to the tune of a three percent increase in consumer spending.

We expect console game spending to seriously recover in 2012 pushing the overall market back to growth. But that year will also witness App Stores and Cloud Gaming making a serious attempt to conquer the living room TV screen. A new battle for the biggest screen is about to begin and will involve all big names from the digital space as well as exciting newcomers, said Peter Warman, chief executive and co-founder of Newzoo.

Newzoo expects a strong increase in spending on social and mobile gaming from last year to this year. Each sector will see a 37 percent increase. Digital distribution will be up 11 percent from last year. Console gaming, which has suffered from a lack of new hardware from the big three, will be down 20 percent. The increases in social, mobile and distribution won't be able to compensate for those losses in console.

Next year, Nintendo's Wii U will hit the market and could revitalize console sales. However, Newzoo thinks the real growth power is in mobile and social gaming.

Everyone in the games industry understands that the new online and mobile free-to-play business models have the power to accelerate growth, especially in Emerging Markets. Not only in number of players but also in money spent. It is exciting to see concrete numbers on these markets and benchmark these with Western countries as well as zoom in on who is actually spending and what they are buying, Warman said.

Related research from NPD Group has also shown a decrease for the video game industry, revenues have been down across the board from last year.

Follow Gabriel Perna on Twitter at @GabrielSPerna