Ars Technica - Why are video game sales looking so weak lately? Blame Nintendo.
But the same probably doesn't apply to the Wii, which definitely had a longer way to fall than its competition. For years after its late 2006 launch, the Wii dominated both hardware and software sales charts. It did so primarily by attracting consumers that hadn't been a big part of the video game market beforehand. But around 2009, Creutz says, those consumers started shifting over to mobile phone and Facebook games in a big way, leaving Nintendo nowhere to go but down from its historical highs (this transition has also caused a lengthy dip in sales for the portable system segment that Nintendo has traditionally dominated).

Even with Nintendo reverting to the mean, though, there's reason to believe that the overall game market might not be in as bad shape as NPD's topline numbers suggest. The company's measurement of new retail sales leaves out the increasingly important market for downloadable games, including free-to-play titles that are bringing in big money on PCs and mobile phones. Even on consoles, NPD's core data doesn't include significant money brought in by downloadable content.