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Video Games Taking Share from Out-of-Town Entertainment Spending

Our company has started analyzing detailed entertainment spending data for 2010. As I reported in the previous blog, household out-of-home entertainment spending saw a decrease in 2010. In the near future we will be analyzing whether the staycation trend is continuing or if we are starting to see a return to spending on entertainment on trips.

In this blog, I decided to take a look at video game hardware and software expenditures and the impact such spending might be having on out-of-home entertainment spending. The graph below shows the share of average total household spending on out-of-home entertainment (both community-based and on trips) combined with video game hardware and software by the three different entertainment categories.

Click to enlarge graph

Between 2000 and 2010, total inflation-adjusted average household spending of all three categories combined declined by 2.7%. But as the graph shows, what is even more significant is that entertainment spending has been shifting away from out-of-home entertainment to the video game category. Most of the shift is coming out of entertainment spending on trips. In the year 2000, spending on video game software and hardware only accounted for 11% of all such entertainment spending. In 2010 it had grown to 22% of all such spending. In fact, average household video game spending doubled during the decade. During the same ten years, entertainment spending on trips decreased from 39% to 28% of all such entertainment spending. The increase in video game spending is being offset by almost exactly the same amount of year-by-year decrease in entertainment spending on trips. The graph lines for the two spending categories are almost perfect mirror images of each other. As one goes up, the other goes down in sync.

The data shows that there is a definite long-term trend; the virtual world is winning and real world out-of-home entertainment venues, especially entertainment venues visited on trips, are losing.

About Randy White

Randy White is CEO and co-founder of the White Hutchinson Leisure & Learning Group. The 31-year-old company, with offices in Kansas City, Missouri, has worked for over 600 clients in 37 countries throughout the world. Projects the company has designed and produced have won seventeen 1st place awards. Randy is considered to be one of the world's foremost authorities on feasibility, brand development, design and production of leisure experience destinations including entertainment, eatertainment, edutainment, agritainment/agritourism, play and leisure facilities.

Randy was featured on the Food Network's Unwrapped television show as an eatertainment expert, quoted as an entertainment/edutainment center expert in the Wall Street Journal, USA Today, New York Times and Time magazine and received recognition for family-friendly designs by Pizza Today magazine. One of the company's projects was featured as an example of an edutainment project in the book The Experience Economy. Numerous national newspapers have interviewed him as an expert on shopping center and mall entertainment and retail-tainment.

Randy is a graduate of New York University. Prior to repositioning the company in 1989 to work exclusively in the leisure and learning industry, White Hutchinson was active in the retail/commercial real estate industry as a real estate consultancy specializing in workouts/turnarounds of commercial projects. In the late 1960s to early 1980s, Randy managed a diversified real estate development company that developed, owned and managed over 2.0 million square feet of shopping centers and mixed-use projects and 2,000 acres of residential subdivisions. Randy has held the designations of CSM (Certified Shopping Center Manager) and Certified Retail Property Executive (CRX) from the International Council of Shopping Centers (ICSC).

He has authored over 150 articles that have been published in over 40 leading entertainment/leisure and early childhood education industry magazines and journals and has been a featured speaker and keynoter at over 40 different conventions and trade groups.

Randy is the editor of his company's Leisure eNewsletter, has a blog and posts on Twitter and Linkedin.

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