US video game market led by Nintendo with sales worth $3.7 billion

The US video game market has been forecast to see sales increase at a compound annual growth rate (CAGR) of 2% over the next four years, to reach a market value of US$22.1 billion by 2016.

The US remains the top country in the world for designing games as well as the place where people spend the most money on video game entertainment - by far. Its market is nearly twice the size of the next largest country, and sales are projected to grow considerably through 2016.

The US video games sector is very top heavy, with three companies - Nintendo of America, Microsoft Corp and Sony Corp of America - accounting for 45% of total sales in 2011. This dominance is especially prevalent within video game hardware, as they accounted for 93% of the sales value, making it difficult for new entrants to penetrate the industry.

The leader within the US video game market is Nintendo of America with sales worth US$3.7 billion and a value share of 19% in 2011. Nintendo has maintained this position because it is involved in many aspects of the video games industry, including both static and hand-held consoles, accessories and software.

The company is also considered a pioneer of the past - with its original Nintendo Entertainment System and hand-held Gameboy - and of the future - with its Nintendo Wii motion-sensing controller system. In 2011, Nintendo sales declined sharply due to the lack of Wii sales, dropping by 29%, as Americans waited to buy Wii U, which was announced for the 2012 holiday period.

Call of Duty: Modern Warfare 3 was the top-selling game of 2011, which didn't break out revenue or the number of units sold. Just Dance 3, Elder Scrolls V: Skyrim, Battlefield 3 and Madden NFL 12 round off the top 5. Warner Bros. Interactive's Batman: Arkham City ranks seventh for the year.

However, there do remain some worrying signs for the US video game market as fewer people are playing video games than last year. About two-thirds of Americans, 211.5 million, play video games in the US. That's approximately 12 million fewer, a 5% decline, than last year. The number of mobile and digital gamers grew over 2011, while 2011's largest gamer category, core gamers, who focus on playing traditional console game systems, declined by 2%.

Mobile gaming is exploding, of people who have mobile app games, 59% of total gaming is done on a mobile device, and close to a quarter of people who play mobile games only play on mobile devices, and never on consoles.

Overall, mobile gamers grew to make up 22% of the gaming population, an increase of 9%. Digital gamers, who primarily acquire games through free and paid downloads, rose 4% to account for 16% of all gamers. Both categories benefitted from the increase in tablet and smartphone penetration, with an estimated 21.5 million iPhones and over 20 million iPads sold in the US during 2011.

For more information on the US video game market, see the latest research: US Video Game Market

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