Sony's updated console's arrival comes as the console videogame industry has entered a tailspin. Sales of new videogames, consoles and accessories at U.S. retail shops fell 22% in December when compared with the same time a year prior, according to surveys by industry watcher NPD Group.
In another sign of the difficult environment for traditional videogame machines, Nintendo Co. 7974.OK -0.56% slashed sales forecasts for its new home console, the Wii U, earlier this week. After launching its first new home console in six years in November, Nintendo said Wii U sales disappointed during the holiday shopping season. The company is now forecasting plans to sell 4 million units versus an earlier estimate for 5.5 million units.
The videogame industry is undergoing a sea change. While videogames used to be limited to dedicated game machines and personal computers, the proliferation of smartphones and other Internet connected devices is opening the floodgates to free or inexpensive games.
Such shifts in consumer behavior and the aging consoles—the Xbox 360 debuted in 2005 and the PS3 a year later—are weighing on game sales, which have contracted every month since December of 2011. Further, Electronic Arts Inc. EA +2.92% said the console industry's packaged goods sales fell by about a fifth last year.