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NPD: Industry Year-Over-Year Declines Widen To 31%

NPD: Industry Year-Over-Year Declines Widen To 31%

July 16, 2009 | By Chris Remo

July 16, 2009 | By Chris Remo
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More: Console/PC

Following a difficult May which saw the video game industry's monthly revenues drop 23 percent year-over-year, new NPD data for the month of June shows an even greater decline over last year's June revenues, with U.S. console retail hardware and game revenues falling 31 percent to $1.17 billion.

Monthly year-over-year comparisons have been worsening in recent months; although overall 2009 to date is only down 12 percent from this same time in 2008, monthly declines have been increasingly worse than that average.

According to NPD analyst Anita Frazier, "this month saw the greatest year-over-year monthly decline since September 2000, when the industry declined 41 percent."

As in past months, Frazier pegged the relative performance on "comparisons against a stellar first half performance last year," while acknowledging that "still, this level of decline is certainly going to cause some pain and reflection in the industry."

Numerous analysts, including Frazier, have said the blow is likely to be softened as the industry heads into its second calendar half, allowing 2009 to possibly match or or even slightly outpace 2008 in the end.

A number of high-profile titles have recently been pushed out to 2010, however. If that trend continues, Frazier warned, those sales expectations "could be be put further at risk."

Hardware sales dropped a considerable 38 percent to $382.62 million -- but while software sales declined less on a relative basis at 29 percent, the software loss in absolute terms was greater at $249.96 million versus hardware's $234.63 million drop.

Hardware sales in units for each platform during June 2009 were as follows:

Nintendo DS/DSi: 766.5K
Wii: 361.7K
Xbox 360: 240.6K
PlayStation 3: 164.7K
PSP: 163.5K
PlayStation 2: 152.7K

All platforms declined from June 2008, with the exception of Xbox 360.

And despite Wii's relative decline, the system is still doing quite well, said Frazier. "Compared against historical performance of other systems this far into the console lifecycle, the unit sales performance is still strong," she pointed out.

In addition to its hardware increases, Xbox 360's software improved its overall standing in the top ten over last month, as fewer Nintendo titles showed up. Significantly, the Wii Play juggernaut failed to crack the top 10 for the first time since its February 2007 release, ending the game's incredible 29-month record.

Electronic Arts put on a strong showing with four titles in the top ten, two on Wii and two on Xbox 360 -- and in the overall top ten, EA fared better than Nintendo on the Wii, grabbing slots 3 and 4 while Nintendo took 5 and 8.

The full June 2009 software top ten list is as follows:

1. Prototype (Radical, Activision) Xbox 360: 419.9K
2. UFC 2009: Undisputed (Yuke's, THQ) Xbox 360: 338.3K
3. EA Sports Active Bundle (EA Canada, EA) Wii: 289.1K
4. Tiger Woods PGA Tour 10 (EA Tiburon, EA) Wii: 272.4K
5. Wii Fit (Nintendo) Wii: 271.6K
6. Fight Night Round 4 (EA Canada, EA) Xbox 360: 260.8K
7. Fight Night Round 4 (EA Canada, EA) PlayStation 3: 210.3K
8. Mario Kart Wii (Nintendo) Wii: 202.1K
9. Red Faction: Guerrilla (Volition, THQ) Xbox 360: 199.4K
10. Infamous (Sucker Punch, Sony) PlayStation 3: 192.7K

Frazier addressed the topic of digital distribution in her analysis, but concluded that it is likely having little overall impact on the console market.

"While some of the decline in retail sales could be a migration on the part of consumers to acquiring content via digital distribution, our reports on downloads and subscriptions reveal that it's not yet having enough impact on the console market to be an overly meaningful factor in the retail down-turn," she said.

"That said, there are increasing avenues for consumers to game, including via mobile devices, and it's clear the industry is sorting through how to manage all these opportunities while deploying resources appropriately."

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