As the economy has recovered, consumer spending bounced back in many categories. However, video games  is one of the categories that consumers did not begin spending on again. Nielsen analysts have studied the patterns of consumer entertainment spending and suggest that the video game industry is facing tough competition. Changes in consumer behavior with respect to entertainment spending could translate into new marketing strategies by video game publishers and retailers.

In 2010, the typical video game buying household saw a 9% increase in its entertainment budget. And here’s how these households allocated their entertainment budgets:

  • Dining out, shopping: 25.1%
  • Video games and related items: 8.5%
  • Mobile phone entertainment: 7.4%
  • Movies at theaters: 4.7%
  • Buying/renting movies: 3.5%
  • Pay TV: 3.2%
  • Buying recorded music: 2.6%
  • Buying magazines/books/newspapers: 2.2%

The only categories to increase last year were dining out/shopping and mobile phone entertainment. The video game category dropped from 9.3% to 8.5% of the entertainment budget. Analysts believe part of the drop is because consumers are spending more time with their mobile devices.

While some of the shift could be attributed to the general recession, “a deeper look suggests structural changes across media and entertainment, such as the rise in mobile spending will continue an elaborate tug-of-war among screens and categories for share of wallet.”

If this holds true, look for video game publishers to begin developing games for mobile devices and to potentially shift their ad campaigns in that direction as well.

[Source: U.S. Video Game Buyers Shifting Entertainment Budgets. NielsenWire.com. 17 Feb. 2011. Web. 3 Mar. 2011]