Gamasutra is part of the Informa Tech Division of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them. Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.

Gamasutra: The Art & Business of Making Gamesspacer
View All     RSS
February 17, 2020
arrowPress Releases

If you enjoy reading this site, you might also want to check out these UBM Tech sites:

Pachter: 'Annus Horribilis' For Publishers, As U.S. PC Game Retail Plummets

Pachter: 'Annus Horribilis' For Publishers, As U.S. PC Game Retail Plummets

December 1, 2009 | By Staff

December 1, 2009 | By Staff
More: Console/PC

Wedbush Morgan's Michael Pachter has been discussing 2009 as "a horrible year" for public video game companies, also revealing that October 2009 U.S. PC game retail sales were down 38 percent to $27 million.

As part of a client note sent out today, video game sector analyst Pachter noted many of the topline NPD numbers for October, with console game retail software sales in the U.S. at $573 million, down 18 percent from last year's $698 million, and much worse than Wedbush's estimate of $635 million (down 9 percent).

Along the way, the analyst also revealed how the money was split -- next generation U.S. retail software sales were $550 million, while current generation U.S. retail software sales were $22 million. Even more interestingly, he revealed that PC game retail software sales in the U.S. were down 38 percent year on year to $27 million for October 2009, a previously undisclosed number.

Pachter's comments on the year so far read as follows: "2009 continues to be a horrible year for video game publishers. Although a small rebound to sales growth in September sent a signal that the console cycle is not quite dead yet, investor confidence remained shaken when October sales again reverted to a year-over year double-digit decline."

"Historically, video game publishers have traded at a premium to the overall market, as investors generally accepted that the video game industry's growth prospects were superior to those of the market as a whole. But clearly, conventional wisdom has been challenged throughout 2009, as monthly software sales declines have become the norm, leading many investors to believe that the industry is in a state of secular decline."

"We think that year-over-year declines for the music genre have contributed to the decline in sales growth in recent months, and believe that console price fatigue drove negative industry trends throughout the middle part of the year. The console price cuts triggered a rebound in unit sales, and we expect solid hardware unit sales in November and December, with the Xbox 360 and DS likely flattish year-over-year, Wii and PSP sales down significantly, and PS3 sales up significantly."

"While we expect software sales growth to return to positive territory in November, we expect a reversion to negative sales growth in December, as the music category appears to be down significantly. Once we're past the holidays, we expect solid sales gains each month through October 2010. If we're right, we think that multiples for the group will begin to expand, and we anticipate that the video game publisher group will outperform the market as a whole substantially during the first quarter of 2010."

"Of course, each publisher will remain susceptible to criticism, with investors likely discounting the performance of The Beatles: Rock Band and Left 4 Dead 2 as low-margin contributors for EA, and others skeptical of the staying power of Activision's Guitar Hero franchise. We expect U.S. and European sales to be roughly flat in the fourth quarter of 2009, resulting in a decline in software sales for the full year of 8-10 percent, compared to -11 percent year-to-date performance."

Pachter's comments particularly refer to public companies and the retail game market in the U.S., with many commentators suggesting that free-to-play online games and digital downloads are making up for some or all of the gulf in retail sales. However, with a lack of conglomerated digital game sales information, it's difficult to gauge the overall current trends precisely.

Related Jobs

None —


Loading Comments

loader image