The video game hardware and software industry has had a terrible 2012. As this set of charts shows, the industry has experienced double-digit sales declines every month this year.
Smartphones have emerged as a rival gaming platform to more expensive consoles such as the Wii, Xbox and PlayStation series.
On top of that, in the wake of the Newtown shooting, violent video games have come under attack from the National Rifle Association and lawmakers for contributing to gun violence in the U.S. While the academic research still shows no conclusive link between youth violence and video games, the industry will faces a big public relations challenge heading into 2013.
The good news is that Nintendo (NTDOY) Microsoft (MSFT) and Sony (SNE) are rolling out new console games that may light a fire under sales. The new Wii U, priced at around $299, has done quite well this holiday season.
Even so, this industry faces some serious headwinds next year.
Microsoft (MSFT) is held in client accounts as of November 30, 2012. This investment may or may not be currently held in client accounts. The reader should not assume that any investments identified were or will be profitable or that any investment recommendations or investment decisions we make in the future will be profitable.
Certain investments discussed in this presentation are for illustrative purposes only and there is no assurance that any manager will make any investments with the same or similar characteristics as any investments presented. The investments are presented for discussion purposes only and are not a reliable indicator of the performance or investment profile of any composite or client account. Further, the reader should not assume that any investments identified were or will be profitable or that any investment recommendations or investment decisions made by model managers in the future will be profitable.