“We have a new hardware platform and we’re putting out software every 90 days,” Riccitiello told IndustryGamers. “Our fastest growing platform is the iPad right now and that didn’t exist 18 months ago. … Consoles used to be 80 percent of the industry as recently as 2000. Consoles today are 40 percent of the game industry.”

An interesting observation coming from the CEO of one of the biggest games publishers in the world. It seems that iOS and the devices that run it have indeed created pricing and customer migration pressure for the traditional gaming platforms whose proprietors initially dismissed them.

As Riccitiello observed during EA’s Wednesday earnings call: “Gone forever is the 4- to 5-year console cadence that gave developers ample time to invest and retool for the next big wave. Consider that just 18 months ago, there was no iPad, Google was just experimenting with Android and most big games were limited to a single revenue opportunity at launch. Consider that each of the major consoles now has a controller that encourages users to get off the couch and get into the action. On smartphones and tablets like the iPhone and iPad, the top paid apps are all games.”

Which is true, I suppose. That said, smartphones and tablets do seem to cater more to casual gamers than hardcore ones these days. But continuing enhancements in processing power and graphics and further hardware improvements should make them more appealing to the latter crowd in the future.

If it was, surely we wouldn’t be seeing the sixth consecutive month of declining sales reported by NPD. According to the market research firm, overall sales in the United States in August of hardware, software and game accessories were $909 million–a 16 percent drop from the same period a year ago.

Hardware sales were down 25 percent for the month and 17 percent for the year. Software fared little better. It was down 15 percent for the month and 14 percent for the year.

Six straight months of falling sales. Overall, the industry is down 14 percent for the year, earning nearly $9.1 billion so far in 2009, according to NPD. Is this a trend that can be dismissed with the standard “well, software drives console sales” explanation? I’m not so sure. It’s not like Mario Kart and Madden NFL 10 have disappeared from the shelves. Indeed, they’re still top-selling titles. They’re still driving sales. They’re just driving a hell of a lot fewer of them.

Indeed, Electronic Arts (ERTS) CEO John Riccitiello bemoaned this very fact in an email to employees, released yesterday. “It is discouraging that one of our highest-rated and best-marketed ‘Madden’ titles in years is facing strong headwinds,” he said, adding industry trends “present a challenge.”

Perhaps that’s because we’re in the middle of the worst American recession in 50 years and $40 for a videogame is still $40. I’ll bet $5 and my old Intellivision that the videogame industry will post its first year-over-year loss since 2004 this year.

Hardware Sales:

1. Nintendo DS     552.9K
2. Wii     277.4K
3. Xbox 360     215.4K
4. PlayStation 3     210.0K
5. PSP     140.3K
6. PlayStation 2      105.9K

Top 10 Software Sales:

1. Madden NFL 10 (Xbox 360, Electronic Arts): 928,000
2. Wii Sports Resort (Wii, Nintendo): 754,000
3. Madden NFL 10 (PS3, EA): 665,000
4. Batman: Arkham Asylum (360, Square Enix): 303,000
5. Batman: Arkham Asylum (PS3, Square Enix): 290,000
6. Madden NFL 10 (PS2, EA): 160,000
7. Dissidia Final Fantasy (PSP, Square Enix): 130,000
8. Wii Fit (Wii, Nintendo): 128,000
9. Mario Kart Wii (Wii, Nintendo): 120,000
10. Fossil Fighters (DS, Nintendo): 92,000

“The human imagination is an amazing thing. As children, we spend much of our time in imaginary worlds, substituting toys and make-believe for the real surroundings that we are just beginning to explore and understand. As we play, we learn. And as we grow, our play gets more complicated. We add rules and goals. The result is something we call games.”

– Will Wright, Wired, April 2006

Celebrated game designer Will Wright has a new job: doing whatever he damn well pleases. He’s leaving Electronic Arts (ERTS), the game publisher for which he developed Spore and the wildly successful Sim City and The Sims franchises, to run Stupid Fun Club, an entertainment think tank developing ideas for everything from toys to TV. “The entertainment industry is moving rapidly into an era of revolutionary change,” Wright said in a statement. “Stupid Fun Club will explore new possibilities that are emerging from this sublime chaos and create new forms of entertainment on a variety of platforms.”

Wright and EA each own equal percentages of Stupid Fun Club, and the company has first right of refusal for game concepts that arise from the venture, so this isn’t quite the blow to EA it might at first seem. In fact, it may turn out to be a boon. With the novelty of EA franchises like Madden NFL, Need for Speed and the Sims fading and sales declining, the company desperately needs some big, new, innovative ideas. And who better than Wright to fish them out? Certainly, there must be far better games than Need for Speed XXX waiting to be developed in that “sublime chaos” Wright hopes to explore.

“The human imagination is an amazing thing. As children, we spend much of our time in imaginary worlds, substituting toys and make-believe for the real surroundings that we are just beginning to explore and understand. As we play, we learn. And as we grow, our play gets more complicated. We add rules and goals. The result is something we call games.”

– Will Wright, Wired, April 2006

Celebrated game designer Will Wright has a new job: doing whatever he damn well pleases. He’s leaving Electronic Arts (ERTS), the game publisher for which he developed Spore and the wildly successful Sim City and The Sims franchises, to run Stupid Fun Club, an entertainment think tank developing ideas for everything from toys to TV. “The entertainment industry is moving rapidly into an era of revolutionary change,” Wright said in a statement. “Stupid Fun Club will explore new possibilities that are emerging from this sublime chaos and create new forms of entertainment on a variety of platforms.”

Wright and EA each own equal percentages of Stupid Fun Club, and the company has first right of refusal for game concepts that arise from the venture, so this isn’t quite the blow to EA it might at first seem. In fact, it may turn out to be a boon. With the novelty of EA franchises like Madden NFL, Need for Speed and the Sims fading and sales declining, the company desperately needs some big, new, innovative ideas. And who better than Wright to fish them out? Certainly, there must be far better games than Need for Speed XXX waiting to be developed in that “sublime chaos” Wright hopes to explore.

But–as many readers have requested–they will all be available in their entirety in this column.

Here’s an interview I did with Activision Chairman and CEO Bobby Kotick about the state of the gaming business.

The video of the interview is in three parts.

It’s a good week to focus on the gaming industry since Electronic Arts (ERTS) abandoned its hostile acquisition bid for Take-Two Interactive (TTWO) over the weekend.

EA’s effort was motivated, in part, by Activision’s recent merger with Vivendi Games, which includes Blizzard Entertainment’s “World of Warcraft,” one the most popular multi-player games.

The merger has made Activision (AVTI), with its own well-known franchises–especially the hugely popular “Guitar Hero,” which debuted version IV at D6–one of the gaming industry’s largest companies.

In this second video, Kotick talks about virtual goods and in-game advertising, the international market, set-top boxes, violence and “Grand Theft Auto,” the competitiveness of the gaming business, the situation at Yahoo (he was, until recently, a board member), and takes a question from the audience about social gaming.