NPD: Social Gaming Eating into Traditional Game Revenues

A new NPD reports find that the popularity of social network games means people are spending less on traditional computer and video games.

A new report from market research firm NPD Group finds that a the popularity of social networking games is eating into traditional computer and video game revenue, as experienced gamers who are pulled into social gaming spend less on gaming overall.

According to the report, a startling 20 percent of the U.S. population over six year old has played a game on a social network in the last three months—that adds up to over 55 million U.S. consumers. Of those players, some 35 percent are new to gaming altogether, reporting that they have never played other online or computer games before playing on social networks. And while those new players tend to be females and older consumers, NPD says the perception that social network games are dominated by female players isn’t true: their report found 47 percent of social network gamers are make, and 53 percent female.

However, if 35 percent of social network gamers are new to gaming, that means 65 percent of social network gamers are not new to gaming, and the amount of time they spend on social network game reduces the amount of time—and the amount of money—they spend on other forms of gaming. Gamers in the survey reported spending some 20 percent less on gaming since they started playing social network games.

“Although 35 percent of social network gamers are new to gaming, it’s clear that a lot of existing gamers have been drawn into the social network gaming arena as well,” said NPD industry analyst Anita Frazier, in a statement. “This impacts both the time they spend with other types of gaming, as well as the amount of money they’re spending on gaming. As more players are drawn into these games, the entire games industry is going to feel, and have to adjust to, the impact.”

NPD notes that some 10 percent of social network gamers report having spent real money on social network games, while 11 percent indicated they’re likely to do so in the future.