Teens are losing interest in playing traditional video games on consoles, and prefer to play social or online games instead, according to a new survey of high school students by analyst firm Piper Jaffray.
The group's report says participants in the survey stressed the importance of feeling connected to their friends. Many respondents believe traditional games lack social features that keep them connected with friends and thus are "a waste of time," while social and mobile titles feel more productive to them.
In its survey, 65.9 percent out of 5,600 respondents said they are losing interest in playing video games, compared to 63.5 percent a year ago. Meanwhile a growing share of teens said they are willing to play games on their mobile phones, 66.2 percent now versus 34.4 percent in Spring 2011.
And 25.3 percent said they play social games on sites like Facebook, which is a little less than the 25.9 percent recorded a year ago but still more than the 18.3 percent recorded last fall. Notably, 92.8 percent of social game playing teens are not willing to buy virtual goods, which is more than the 80.5 percent that said they weren't willing six months ago.
As a result, Piper Jaffray cautions investors against betting on traditional console gaming: "We expect traditional packaged goods game sales to continue a decline during the next two years as gamers shift to digital offerings.
"While a console refresh in 2013 or 2014 will breathe new life into the industry, the new systems will face unprecedented competition from tablets, smartphones, and connected TVs. We expect growing middle classes and rising Internet penetration rates in emerging markets, particularly Latin America, Eastern Europe, and Asia-Pacific to partially offset competition from tablets and smartphones."
Piper Jaffray also found that 53 percent of teens would be receptive to downloading full games on their consoles, which is up from 45.8 percent a year ago and from 25.9 percent 18 months ago. 36.1 percent of teens said they're willing to pay a flat monthly fee for an on-demand gaming service like OnLive, too, an increase from 34.3 percent a year ago and 20.9 percent 18 months ago.