Videogame Sales dropped by 18 percent
“It may be that consumer demand for video games is starting to reflect the overall [downward] trends in consumer demand. But I think that in the long run, the video game industry is likely to suffer less in this economy than other industries,” he said.
Remo said that certain new titles released in March, such as Grand Theft Auto: Chinatown Wars, were expected to sell far more units than they did, indicating that the overall quality of new titles was likely also a factor in the sales drop. Market watchers had expected Chinatown Wars, released March 17 in North America, to sell “several hundreds of thousands” of units but wound up moving fewer than 100,000 last month, he said.
Video game sales plunge in March
It turns out the video game business isn’t recession-proof after all.
Industry sales in March plunged 17 percent from the same period a year earlier, according to data released this week from NPD Group, a market research firm. The downturn marked a big reversal from recent months, when the industry posted healthy growth despite the deteriorating economy. Indeed, the March sales decline was steep enough to cancel out the growth the industry posted in the first two months of the year.
The industry’s falling fortunes left observers forecasting tough times ahead.
“The economy’s a key driver,” said Norm Conley, CEO of JAG Advisors, a money management firm based in St. Louis that owns shares of game publisher Activision-Blizzard. “With prolonged, continued economic weakness “… it’s going to be hard for growth rates to avoid falling.”
Until last month, the video game industry had been one of the bright spots in an otherwise bleak economy. Last year, the industry enjoyed record growth as U.S. retail sales of games, game machines and accessories rose 19 percent to $18 billion.
Growth began to slow in the last several months of last year. But retail sales of video game products reached $5 billion in a month for the first time ever in December, thanks to 9 percent growth from December 2007. And for the first two months of this year, the industry was growing at an 11 percent annual rate.
Videogame Sales Drop 17% in March
SAN FRANCISCO– Videogames sales took a surprising turn south during the month of March, as the slowing economy combined with fewer blockbuster releases.
According to a report from the NPD Group, sales of game software in the U.S. fell 17% during the month, compared to the same period the previous year. Wall Street analysts had largely been expecting sales to remain flat for the period.
Game hardware shared a similar fate, with sales falling 18% for the month. Accessories fell 15% during the period.
Part of the challenge for the industry was a difficult comparison with the previous year. Last March saw the release of three big titles, including Nintendo’s Super Smash Bros: Brawl, which sold 2.7 million units during the month. Other big sellers last year were Tom Clancy’s Rainbow Six: Vegas from Ubisoft and Army of Two fromElectronic Arts Inc.
“This is very much like September of last year, which did not compare favorably to September of 2007 as the result of a huge game launch, Halo 3,” said NPD analyst Anita Frazier.
The biggest title this time around was Capcom’s Resident Evil 5, which moved 938,000 units on the Xbox 360 and another 585,000 units on Sony Corp.’s PlayStation 3. Halo Wars from MicrosoftCorp. sold 639,000 units for the company’s XBox 360.