As mobiles apps about, wither video games?

Despite the gaming rage, sales of video games are down. Is that because of fatigue or the onslaught of mobile devices and their casual games?

Why are video game sales down? Two words. Ho hum.

"When the 360 came out, the initial problem was, geez, we don't have enough high def televisions," says Mike Hickey, a senior equity analyst with National Alliance Securities.

He says now we have lots of high definition TVs, but new Xbox 360 consoles from Microsoft? No. "And we're not blown away by the current game experience," he says. "All the games that come out are just iterations of prior ones." That's because our consoles are maxed out technologically, Hickey notes.

It's been seven to eight years since the last new gaming consoles were released and video game fatigue has set in.

"This is the longest cycle we have ever had in the video game space, which is all the more reason why we're seeing declining sales," says Arvind Bhatia, a managing director at Sterne Agee.

He says more games bought and played on smart phones, tablets and ordinary computers are also eating in the traditional video game sales. Zynga, the producer of the virally popular game Farmville, also reports earnings today. But analysts expect it to lose money due to all the new competition.

About the author

Sally Herships is a regular contributor to Marketplace.

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