July 15, 2022

Happy Friday. I hope you like numbers because I’ve got a lot of them for you today.

Today’s edition: 954 words, 3½ minutes.

1 big thing: First-half reality check

Elden Ring. Screenshot: FromSoftware

Spending on video games in the U.S. declined 10% compared to the first half of 2021, down to $26.3 billion, tracking firm NPD reported today.

Why it matters: The market is cooling, due in part to temporary factors like a lack of major game releases and constraints capping console supply.

Details: Most major categories dropped when comparing the first half of 2022 to 2021.

  • Game content spending is down 10%.
  • Hardware spending is down 9%.
  • Accessories are down 14%.
  • Subscriptions were the only major category with a spending increase, but NPD hasn't made the exact figure public.

Mobile gaming has also been taking a hit.

  • Tracking firm Sensor Tower says spending on mobile games was down 10.7% in June, compared to the same month a year ago.
  • The drop was on Google Play, with a slight increase on Apple platforms.
  • Yesterday, Sensor Tower reported that for the first time spending on non-gaming apps overtook spending on games in Apple’s U.S. app store during the second quarter of 2022.

Between the lines: It's unclear how much inflation has played a role in curtailing the desire to spend money on games.

  • But the lack of major releases since a winter bumper crop is striking.
  • Older games dominated NPD’s top 10 game list for June with only one new release, Nintendo’s Mario Strikers: Battle League, cracking the top 10 (in the third slot).
  • February’s Elden Ring keeps topping the charts, including in June. It is NPDs best-selling game for the last 12 months, outpacing the most recent Call of Duty.

The bottom line: The numbers underscore the myriad impacts of a pandemic that had temporarily intensified the public’s appetite for games and continues to complicate the ability of people to create and sell stuff to play.

  • It’s no surprise that one analyst is expecting a small but rare contraction in the gaming market this year, before a return to growth.

Fun fact: NPD’s Mat Piscatella tells Axios that June saw the sale of one Nintendo DS, a system discontinued by its manufacturer many years ago.

2. The week ahead

Stray. Screenshot: Blue Twelve, Annapurna Interactive

Get ready for a massive week for people who want to play games as animals. We've got a cat game and a deer simulator coming right up.

Saturday and Sunday, July 16 & 17

  • The Games 4 Change Festival continues on Saturday, with sessions on Minecraft, games as a means for health equity, and a talk by Atari founder Nolan Bushnell about the future of gaming and education. (To watch virtually, sign up here.)
  • The first in-person TwitchCon since 2019 is held all weekend in Amsterdam.
  • TennoCon, a showcase event for popular free-to-play game Warframe, is being held virtually.
  • For esports fans, we recommend a skim of Juked's handy calendar for the weekend’s events.

Monday, July 18

  • A quiet day

Tuesday, July 19

Wednesday, July 20

  • Space Western TombStar (PC) is released.

Thursday, July 21

Friday, July 22

3. Need to know

🍿 Nintendo is purchasing Tokyo-based animation studio Dynamo Pictures and will rename it Nintendo Pictures. The company will use the studio “to focus on development of visual content utilizing Nintendo [intellectual property].”

🛹 The next Skate game will be called Skate, not Skate 4 and will be free-to-play, publisher EA has announced (via IGN).

🇷🇺 Russian tech companies are calling for the creation of a “national game engine,” following the exodus of foreign gaming and tech companies after Russia’s invasion of Ukraine, PC Gamer reports.

💰 Sony PlayStation’s $3.6 billion acquisition of Bungie is officially complete, the Destiny studio tweeted today. Sony had previously indicated it expected the deal to close between September and the end of the year.

4. Fine print report, Nintendo edition

Shigeru Miyamoto with Super Mario in 2015. Photo: Toshifumi Kitamura/AFP via Getty Images

I did it for Activision, Take-Two, EA and Ubisoft. Now it’s Nintendo’s turn.

  • I’ve read through the company’s new, 88-page annual report more closely than is probably healthy.
  • For the other publishers, some key changes were notable. Same here, but so are a few things that haven’t changed.

Without further ado:

  • Pay for top Nintendo execs remained the same for the year ending March 31, 2022, as it was the year prior: President Shuntaro Furukawa’s compensation is 318 million yen ($2.3 million); Donkey Kong/Mario/Zelda lead creator Shigeru Miyamoto, who serves as company fellow earned 252 million yen ($1.8 million).
  • Company headcount increased from 6,574 to 6,717 (a rise in workers in Japan compensated for a drop in the U.S., where Nintendo closed its San Francisco satellite office).
  • The average minimum salary dropped from $88,276 to $81,705.

Labor notes:

  • In a section about risks to the company, Nintendo added “labor disputes such as strikes” between difficulties in recruitment and disruptions from terror attacks.
  • In a conspicuous non-change, Nintendo, which along with a contracting firm is subject to a current National Labor Relations Board complaint, repeated the following language used in last year’s filing: “Labor unions do not exist in the Company but have been formed at some of its consolidated subsidiaries. Labor-management relations have been good, and there are no particular matters to be noted.”

My favorite edit:

  • 2021: “As a company that creates entertainment to bring smiles to people’s faces, Nintendo…”
  • 2022: “As an entertainment company that creates smiles, Nintendo”
  • I think Axios Gaming’s copy editors would approve.

Big thanks to Amy Stern for copy editing today's newsletter.

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🐦 Find me on Twitter: @stephentotilo.

Risks to Axios Gaming include getting distracted by my Twitter feed and hankering for snacks.