What happened? People are simply shifting their gaming time—and dollars—to mobile and social gaming. NPD analyst Liam Callahan said physical retail sales "account for roughly 50 percent of the total consumer spend on games." (Read More: 'Game Over' For Videogame Makers?)
When including digital sales—both add-on content and social and mobile games, among other things—NPD estimates the total spending for the month to be over $4.1 billion. That's right in line with spending just on physical games a year ago, not including last year's digital revenue.
The bottom line: New digital revenue is failing to compensate for physical game declines. (Read More: Got Game? Videogame Industry Turns to Mobile.)
But even in this weaker environment the biggest game makers are churning out bigger hits than ever.
The top titles continue to break records—like Activision's "Call of Duty: Black Ops II," which was the biggest game in December and of the year. This is the fourth year that Activision's "Call of Duty" franchise had the top game.
Electronic Arts' "Madden NFL 13" and Microsoft's "Halo 4" rounded out the top three list for the year—those "13" and "4" numbers a reminder of the fact that it's the sequels that succeed: If people are going to shell out $60, they're more likely to trust proven brands.
It's increasingly a hit driven business, with the top ten titles generating a larger share of game sales—12 percentage points more—than a year-ago December.