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Aging consoles, infrequent releases hurt U.S. retail game sales in May

Aging consoles, infrequent releases hurt U.S. retail game sales in May

June 14, 2012 | By Tom Curtis

June 14, 2012 | By Tom Curtis
More: Console/PC, Business/Marketing

Video game sales at U.S. retail experienced some major declines in May, continuing the industry's downward trend at retail over the last several months.

Overall, the retail game industry experienced a 28 percent decline in retail sales to $516.5 million, down from $718.9 million in May 2011. Hardware proved to be the biggest negative contributor, as that category saw sales decline 39 percent to $138.9 million.

This hardware decline is somewhat expected, as many of the current platforms are reaching the end of their lifespan. According to NPD analyst Anita Frazier, however, a significant portion of this month's decline can also be attributed to the year's sparse lineup of hit games.

"YTD 2012, there have been 27 percent fewer new software title introductions into retail which we believe is a big part of the softness we're seeing in May sales," she said. "A title obviously continues to see sales beyond its launch month, so there is a longer term impact from a narrower array of available new content."

With the sparse release lineup, software sales (including PC) saw a 16 percent drop to $335.2 million, slightly below analyst estimates. Prior to the NPD report, analyst firms Piper Jaffray and Wedbush Securities predicted that software sales would reach as high as $338 million or $350 million, respectively.

Looking at individual releases, Blizzard's PC exclusive Diablo III was the leading title for the month -- an impressive feat, considering it launched on only one platform and the NPD's data only covers boxed units sold at retail stores. Copies sold digitally via do not factor into its data.

While the year's new release lineup has been relatively empty, May saw the introduction of other major titles such as Rockstar's Max Payne 3 and Ubisoft's Tom Clancy's Ghost Recon: Future Soldier, both of which secured a place near the top of the month's software charts.

The top ten best-selling games at retail for the month were as follows:

1. Diablo III (Activision Blizzard, PC)
2. Max Payne 3 (Take-Two, Xbox 360, PS3, PC)
3. Tom Clancy's Ghost Recon: Future Soldier (Ubisoft, Xbox 360, PS3)
4. Prototype 2 (Activision Blizzard, Xbox 360, PS3)
5. NBA 2K12 (Take-Two, Xbox 360, PS3, Wii, PSP, PS2, PC)
6. Call of Duty: Modern Warfare 3 (Activision Blizzard, Xbox 360, PS3, Wii, PC)
7. Sniper Elite V2 (505 Games, Xbox 360, PS3)
8. Battlefield 3 (EA, Xbox 360, PS3, PC)
9. Dragon's Dogma (Capcom, Xbox 360, PS3)
10. Just Dance 3 (Ubisoft, Wii, Xbox 360, PS3)

"To dig deeper into the new physical retail software performance this month, new launches generated 31 percent more dollars this May than they did last May, largely due to the success of Diablo III," Frazier added.

Looking at specific hardware platforms, the top selling console for the month was the Xbox 360, which Microsoft says sold 160,000 units. Of the three current home consoles, the Xbox 360 has been the number one seller for 17 consecutive months.

Frazier said that among all the hardware platforms on the market, Nintendo's 3DS was the only platform to see an increase in unit sales year over year.

While the May NPD numbers certainly look a bit grim compared to this time one year ago, Frazier pointed out that the firm estimates that these totals make up only 50 to 60 percent of the total consumer spend on games.

"When you consider our preliminary estimate for other physical format sales such as used and rentals at $155 million, and our estimate for digital format sales including full game and add-on content downloads including microtransactions, subscriptions, mobile apps and the consumer spend on social network games at $420 million, we would estimate the total consumer spend in May to be $1.17 billion," she said.

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