Video Games Dominating Market

Forrester research recently released a study indicating that the sale of digital music will significantly increase this year and far surpass the sale of physical product. According to Forrester Vice President and Principal Analyst James McQuivey, this is partially because the “industry has failed to capitalize on the growing popularity of video games.” As it turns out, video games are quickly becoming the champions of musical retail product, which is big news for music executives.

Forrester research recently released a study indicating that the sale of digital music will significantly increase this year and far surpass the sale of physical product. According to Forrester Vice President and Principal Analyst James McQuivey, this is partially because the “industry has failed to capitalize on the growing popularity of video games.” As it turns out, video games are quickly becoming the champions of musical retail product, which is big news for music executives.

According to new data from the market research firm NPD, spending on music fell 10 percent in 2007, while video game spending tripled in the same time period. While retail sales of video games jumped 41 percent, retail CD sales fell 45 percent. However, NPD says gamers who play regularly become the biggest consumers of non-gaming fare, such as DVDs, CDs and digital music.

As McQuivey stated, “video games such as ‘Guitar Hero’ and ‘Rock Band’ can motivate even the most depressed music executive in a video game market where titles can sell five million copies.” With the increasing sale of video games over other physical product, his statement rings true. In addition, it shows that not all is lost for other forms of physical product; with more people buying video games, according to NPD, more people will begin to consume other kinds of retail product, as well.

Watch out, iTunes. When “Guitar Hero: Aerosmith” hits the stands this summer, NPD suggests a new trend might emerge.