Video Games Sales For July Drop More Than Expected
Posted on: Friday, 14 August 2009, 13:15 CDT
Video game sales had a steep drop in July, showing an even bigger decline than what many analysts were expecting during the recession, The Associated Press reported.
Gaming hardware sales, along with software and accessories dropped to $848.8 million -- a 29 percent drop from the same period last year, according to Market researcher NPD Group.
Sales have now declined for 5 straight months this year and the recent drop was even bigger than analysts anticipated.
Mike Hickey, an analyst for Janco Partners, had only expected a 15 percent decline for the year, but sales were already down 14 percent at the end of July, totaling $8.16 billion.
NPD analyst Anita Frazier said that while year-to-date results were weak, there were some big titles to be released over the next several months, including 'Madden' this month, which should help spur sales.
The recession has led to many gamers being more selective about what video games they buy, and many are waiting for blockbuster game launches coming later in the year. Many others are also hoping for console price cuts.
Anticipated price cuts for gaming consoles have likely caused the considerable drop in hardware sales in July, NPD analysts said.
Portable gaming system and console sales tumbled 37 percent to $280.9 million. The month's best-selling system was the Nintendo DS, with 538,900 units sold. Nintendo’s Wii sold 252,500 units and Microsoft Corp.'s Xbox 360 with 202,900 units. Sony Corp.'s PlayStation 3 sold just 121,800 units.
Wedbush Morgan analyst Michael Pachter said the industry needs hardware to turn around or it is going to be in trouble.
However, the industry will most definitely turn around in September because of huge game launches planned for that month. But, he added, the trough on the decline "is worse than I thought."
"Wii Fit" and "Grand Theft Auto IV" were blockbuster games last spring and summer. But the first half of 2009 has been unusually slow when it comes to top-flight game launches -- and contributions from the current recession have hurt sales in the retail game industry.
“But the worst comparisons should be behind us, and looking beyond August we have 'The Beatles: Rock Band, ‘Halo 3: ODST,' and of course, 'Call of Duty: Modern Warfare 2' to look forward to,” said Frazier.
Software sales in July fell 26 percent to $437 million. The No. 1 game was Nintendo's "Wii Sports Resort," followed in No. 2 and No. 3 by Electronic Arts Inc.'s "NCAA Football 10" for the Xbox 360 and the PlayStation 3, respectively.
The top five rounded out with "Wii Fit," which launched in May 2008, and "Mario Kart" from April 2008.
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Source: redOrbit Staff & Wire Reports
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