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NPD: Behind the Numbers, March 2009
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NPD: Behind the Numbers, March 2009

April 18, 2009 Article Start Page 1 of 5 Next
 

Prior to the release of the NPD Group's March 2009 sales data on Thursday, which tracks U.S. retail console video game sales, most analysts and observers expected that the industry would eke out another month of growth.

With the results in, and industry sales down nearly 17% overall, the discussion has shifted to look for explanations for the drop.

Below we cover some essential features of the retail landscape in March 2009. Read on for details about first-night sales of the Nintendo DSi, price drops for PlayStation hardware, Capcom's strong software sales, and the fate of third-party software on the Wii.

Hardware Generally Down

Other platforms have seen sales growth while Sony's PlayStation hardware line has suffered a few months of year-on-year declines.

Yet in March 2009 Sony's systems were joined by the Nintendo Wii and DS in weaker sales. Only the Xbox 360 saw a year-on-year increase from the rate in March 2008.Here's the last year's weekly sales rates:

Weekly Console Sales Rates

The Wii dropped to 120,000 systems per week in March 2009, down from 144,000 per week a year before and from 188,000 in February 2009. That's the weakest showing for the Wii since August 2008.

Despite year-on-year growth (from 52,000 units per week to 66,000 units per week), the Xbox 360 did see a month-on-month decline from almost 98,000 per week in February 2009. Like the Wii, the last time the Xbox 360 had a weekly sales rate this low was in August 2008.

The PlayStation 3 hit 43,600 systems per week in March 2009. The last month that the PlayStation 3 sold so poorly was October 2007, when it hit 30,250 systems per week, right before the introduction of the 40Gb PlayStation 3 at $400. This is the fifth straight month of year-on-year declines for the PlayStation 3.

As we have suggested since the last quarter of 2008, Sony is enduring an extremely painful period, one in which it feels immense pressure both to cut the price of the PlayStation 3 and simultaneously to remain profitable.

One suspects that Sony wishes to wait until its E3 presentation in six weeks to announce a price cut. In that case, Sony will deny any price cuts are forthcoming until the very last moment and, consequently, suffer yet again for at least two more down reports for April and May.

The PlayStation 2 finally got a cut to $100 during the last week of the March 2009 reporting period, and so the NPD group recorded four days of sales at that new price. Sales of the system were down to 22,400 systems per week for the month – the very lowest sales rate for the system since its launch in October 2000.

We stand by our conclusions last month: the cut achieves little. (Incidentally, this is also the view voiced by SCEA's Jack Tretton in July 2008 and last week by GameStop CEO Dan DeMatteo.)


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