NPD has released its December 2012 report, and much like the year itself for the gaming industry, it was not a good one. Retail sales were $3.21 billion, down 22 percent over last year, while 2012’s total sales were $13.26 billion, also down 22 percent over 2011.

While this is certainly gloomy, the NPD does note that console gamers are increasingly turning to digital to get their fix. “2012 was also the best year for point card and subscription card sales as gamers sought digital content on Xbox Live, PlayStation Network, and Nintendo’s eShop. Games like Journey and Minecraft broke records for number of games downloaded,” said NPD industry analyst Liam Callahan.

The NPD believes that this year is akin to a transition year when a set of old consoles is waning. “An apt historical comparison for this this month is December 2005, which was the first December of the previous console generation. As a testament to how much the retail market has grown, overall physical dollar sales in December 2012 are up 10 percent when compared to December 2005,” commented Callahan.

“In December 2012, positive trending for many annualized franchises like Call of Duty, Skylanders, Assassin’s Creed, and FIFA, points to consumers’ increased spending on hits, but that middle-tier games as well as catalog titles are suffering. This is evident in examining the share of December dollar sales that the top ten titles generated, which was 46 percent in December 2012, up 12 percentage points from last December,” he continued. “A major culprit in the decline in retail sales in 2012 was the lack of new releases with 29 percent less SKUs across consoles, portables, and PCs. However, the SKUs that were released generated 8 percent more units per SKU and 11 percent more dollars per SKU.”

Call of Duty continued to fair well as a brand, with Black Ops II being the best selling title of 2012 and Modern Warfare 3 coming in eighth. Top ten are filled out with sequels and annualized franchises like Madden NFL 13, Halo 4, Assassin’s Creed III, Just Dance 4, NBA 2K13, Borderlands 2, Lego Batman 2: DC Super Heroes and FIFA Soccer 13.