NPD's July 2009 U.S. game industry sales have revealed a 29% overall revenue drop to $849 million, with DS and Wii Sports Resort leading hardware/game sales, as NPD analyst Anita Frazier says that "the worst comps should be behind us."
Overall, U.S. video game software sales declined 26 percent to $437 million year-over-year for the month of July 2009. This continues a poor recent run: June showed a 31 percent year-over-year decline; May, 23 percent; April, 17 percent; March, 17 percent. Sales were last up, year on year, in February 2009, on the back of unexpectedly and unseasonably strong sales of Street Fighter IV and perennial favorite Wii Fit.
Software is overall down 14% year-to-date, at $4.23 billion. The same holds true of overall console game, accessory, and hardware sales: they are also down 14%, taken as a whole, standing at $8.16 billion so far.
In the face of these statistics, overall industry growth in 2009 will be tough, warns Frazier: "In order for the industry to come in flat or slightly up for the total year, the back five months of the year have to come in 11% (or more) higher than the last five months of last year."
However, she sees some possibility of just that, with major titles likely to spur major sales, commenting:
"There are some big titles set to be released over the next several months, including Madden this month, which should help spur sales. The worst comps 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."
Hardware Slows
Regarding U.S. console numbers in the U.S., as surveyed by NPD, "Hardware sales have slowed considerably on nearly every platform," says Frazier.
The patterns observed over the year continue to hold true for July. Frazier says, "The Xbox 360 is the only console system showing a unit sales increase year-to-date, while the Nintendo DS has the highest sales of all hardware platforms both for the month, and year-to-date."
Overall, U.S. game hardware for July is down 37 percent year-on-year for July, at $280.94 million. Year-to-date, hardware sales have hit $2.79 billion, down 16 percent overall.
Hardware sales across all platforms in the U.S. for July 2009 are as follows:
Nintendo DS: 538,900
Nintendo Wii: 252,500
Microsoft Xbox 360: 202,900
Sony PSP: 122,800
Sony PlayStation 3: 121,800
Sony PlayStation 2: 108,000
As a comparison point, all hardware platforms declined in sales from June 2009.
The PlayStation 3's sales are directly comparable to its October 2007 performance; the 40GB unit was introduced in November 2007 and spurred sales. Analysts are expecting console price drops soon, and rumors of a slim PlayStation 3 system continue.
Software: EA and Nintendo Rule
As for game sales, Electronic Arts and Nintendo were the only two companies to get SKUs into the top 10 chart this month; Wii Sports Resort, which debuted this month with a bundled MotionPlus controller, was the number one title. EA's NCAA Football 10, another newcomer, also performed strongly on the Xbox 360 and PlayStation 3.
The chart is otherwise on the predictable side, primarily stacked with perennially popular Wii and DS titles. However, EA continues to find success with EA Sports Active for the Wii, showing its approach to fitness gaming on the platform does resonate with consumers.
The full U.S. console game charts for July 2009 are as follows:
1. Wii Sports Resort (Nintendo), Wii, 508,200
2. NCAA Football 10 (Electronic Arts/EA Tiburon), Xbox 360, 376,500
3. NCAA Football 10 (Electronic Arts/EA Tiburon), PlayStation 3, 237,400
4. Wii Fit (Nintendo), Wii, 164,300
5. Mario Kart Wii (Nintendo), Wii, 156,600
6. Mario Kart DS (Nintendo), Nintendo DS, 132,200
7. Pokemon: Platinum Version (Nintendo/Game Freak), Nintendo DS, 116,400
8. Fight Night Round 4 (Electronic Arts/EA Canada), Xbox 360, 116,400
9. New Super Mario Bros. (Nintendo), Nintendo DS, 101,800
10. EA Sports Active (Electronic Arts/EA Canada), Wii, 96,800
Says Frazier, "NCAA Football 10 was the top selling game for the month, with combined sales of 689K units across all platforms." Meanwhile, she also notes, "Wii Sports Resort was the top-selling software SKU for the month with 508K units sold with a 2.5% attach rate to the hardware install base." Frazier suggests this may imply much future potential for sales.
While The Beatles: Rock Band and Guitar Hero 5 are both yet to debut, Frazier also reveals that the genre may be in trouble. "Of all genres, the music/dance genre has suffered the greatest declines this year, with nearly $390 million less revenues than the same time period last year."
Though retail music games are indeed on the decline, with digital revenues of both console downloads and PC online game subscriptions and microtransactions not counted in the NPD charts, it's difficult to divine the overall health of the video game market from this NPD report alone.
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I thought it interesting to note, and wondered if you could see the same results year over year for the last 5 years for July and August between Madden and NCAA.
It's actually somewhat surprising to me that there isn't more of a drop-off of sales from one year to the next with games that 'update' every year (and often of course there is an increase in sales). My common sense tells me that eventually people will want something different, but the market has never born that out. The sport games market is a great example of consumers that appear to have an insatiable appetite for a better polished 'more of the same' each year.
...and there's nothing wrong with that honestly, as much as I personally love things that are different. Sometimes I get to thinking that people really want innovation and 'different,' but the numbers always bring me back to reality. As a group (gamers), I think we're pretty resistant to change and as Anita's list of games to look forward to for shows, we're mostly just wanting and waiting for a better polished 'more of the same.'
Big blockbuster franchises will always make money like big blockbuster movies. Original and different games usually have low sales, just like Indie movies, once in a while one becomes popular but most of them never pass the 1m barrier.
That quote *is* the real problem IMO.
There are only so many copies of Madden or Rock Band that people can stomach. I've never bought one, and never will. The last game I bought was KillZone2, and I am not even an FPS fan really. The last game I was truly excited about was Fallout 3.
The last game my wife bought was Infamous. She's been waiting for a couple of years for Overlord 2, a sequel to Zelda on the Wii, and for the next Uncharted.
It's not just the global downturn that's slowing sales. It's the gradual drop off off people who have realised that the Wii is crap, and that apparently games on all formats are all going to be the same *forever*, and that on any platform all that seems to be available is Rock Band or Madden NFL.
It's simple : Write some decent games and we'll buy them.
Or perhaps open up a few platforms for real to Indies so they can do your job for you..
PSP? PS3? Even the 360 is not really open to all...
I also noticed some fire sales of the latest Guitar Hero World Tour Band Bundle as retailers looked to reduce their inventory and that would have decreased the price point even further.
Side note:
I love my sports games, because regardless of what people say about them being "essentially the same game each year" they are tech/industry incubators. They and World of Warcraft expansions are innovating around the core gameplay every year to a degree that's at the very least as important as the indie/small developer market.
Personally, I'd say it's more important and is only starting to balance out now because of Steam/PSN/XBLA.
It's worth bearing in mind that if you've never bought a copy of Madden or Rock Band, your purchasing tendencies probably aren't reflective of the rest of the market. After all, while you were passing on those games, millions and millions of people were repeatedly making Madden the most successful franchise of the year.
I think they may be more original stuff available in the industry than ever before, which perhaps is only all the more disappointing when most of it doesn't appear to be grabbing much attention.