Console Sales Soar as Mobile Teeters

If you needed more proof that console gam­ing is here to stay, look no further than the much-ma­ligned Gamestop’s record-breaking sales.

Global sales for the re­tailer soared to $9.04 bil­lion in 2013, breaking its previous 2011 record by $1.7 billion.

That’s impressive when you consider that between the two records, in 2012, the company actually post­ed losses of $269.7 million. The swing brought them up to a $354.2 million profit for the year.

So what’s changed?

New consoles. In 2012, the PlayStation 3 and Xbox 360 were sitting at just about as high an install base as could be expected for six and seven-year-old hard­ware. That is to say, despite amazing existing libraries and some of the best games of the generation coming out around that time, the con­soles had reached about as many buyers as they were going to.

Last fall brought with it two shiny new boxes in the form of the PlayStation 4 and Xbox One. Gamestop stated in a press release that new hardware sales at the company raised 29.7 percent between then and the end of the financial year.

“The launch of new con­soles in 2013 marked the return of innovation to the video game category and GameStop’s market share increased to an all-time high,” Gamestop CEO Paul Raines said. “Our emerging digital and mobile business­es, which did not exist three years ago, surpassed $1 bil­lion of revenue.”

While “traditional” games are riding the high of new hardware, at least one sector of mobile games is in trouble.

King, creators of the hugely successful “Candy Crush Saga,” finally began trading their company pub­licly on the New York Stock Exchange on Tuesday. The results were clearly not what they hoped, with a CNBC economic personality de­scribing it as “a Stephen King horror story. It might be Misery, it could be even Cujo.”

The company began trad­ing their stock at $22.50 a share, but quickly fluctuated wildly — mostly in a down­ward pattern. At the time of this writing, their shares sit at $18.49, down over four dollars from where they started.

Why does Wall Street have such little faith in one of the biggest mobile game producers in the world?

The financial industry is worried that “Candy Crush” Saga might be the compa­ny’s one-hit wonder. While the company’s monthly user count sits at a staggering 400 million, “sitting” is exactly what it’s doing.

That concern rests among others about the long-term viability of the mobile games market. Other casual games companies like Rovio (“Angry Birds”) and Zynga (“Farmville”) have also fall­en into the one-hit wonder category and don’t bode well for the industry as a whole.

While Rovio smartly got into the very lucrative world of merchandising, “Angry Birds” remains their primary success. Meanwhile, Zynga fell victim to the Facebook gaming bubble and a move to mobile development was too little too late for the trou­bled company.

It’s strange to see these trends in casual and “hard­core” gaming seesawing in such wildly different direc­tions. Just a few years ago, economists claimed mobile games were the specter of death for consoles. Now the roles seem to be reversed as the oversaturated, under-curated phone market meets competition from the new consoles’ “seal of quality.”

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