Game sales have been steadily dropping over the past few years, or rather, it should be said that retail sales have been dropping. The social game and app markets are as strong, if not stronger, than they were when they first bloomed a little under half a decade ago now, but they are not directed at the hardcore gamer market. The lionshare of game making has always been the AAA title games, the 'God of War's the 'Grand Theft Auto's, the 'Warcraft's and 'Age of Empires' and 'Mario's of the game industry have always been the goal of all game makers. We want to tell stories and make vast sweeping games that give hours of enjoyment, not piddly little things that people play while on the bus or the toilet.
A rather interesting article came out yesterday from Daily Finance. The author gives some ideas on how one might produce results, and all of his ideas have pros and cons, but I think he's missing a fundamental point: The age of retail in video games has come and gone. It is a mockery, a false choice, an idiot's choice. Why would we ever want to pay for a physical object when the product is actually just bits of data that can be given to use over a line of copper and zinc and rubber. The online game market is where sales are happening now, where it is quick and easy and the purchase can be made right from the system you'll play it on, and a record is kept so that if you ever lose the data you can just download it again. You lose a disk? Your disk is lost, you have to buy a new one. Beyond this fact, he makes some very good points.
The game industry does need to lower it's prices, or more specifically, the retailers and publishers need to do so. So much of game sellers seem to forget that there are more poor people than rich people, and poor people are more likely to spend their money on things that will distract them from how hard life is, after all, their lives are usually harder than those of rich people, they need more distractions. I'm not saying drop the prices enormously, but dropping them to 30 or 40 dollars rather than 60 dollars is probably a good idea, you'll get more sales, and more sales means more investor confidence, and that'll help business all round, not to mention that you get yourself out there.
The next issue he brings up is a better kind of controller, and he might be right there, but at the same time putting in a new controller would alienate older players. I personally cannot stand many of the ways some games use touch screens, but there's no reason that they couldn't work. By using a small touch screen device that communicated with the game, one could alter the specifics of the control for the game.
The last point is the most important. Games need to change. They need to change and transform to be better for casual audiences, without losing their hardercore audiences. Games such as Mass Effect 3 with radically different player modes (narrative, rpg, shooter, plus the normal difficulty level system). Similar tactics will be necessary to keep games nice for both casual and hardcore players.
The point is that games are changing, our audience is changing, our methods of sale need to change. The way we think about and use and make games all need to change, but most of all, to change how we sell and distribute game. If we can handle that change, we will bounce back from this small dip in game sales and profits from retail.