Year in review: Roller coaster year for video games
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Up and down. Down and up. That was the story in 2009 for the video game industry, a year in which sales of Nintendo's Wii, Microsoft's Xbox 360, and Sony's PlayStation 3, and software for them, roared long after the recession battered consumers' wallets, and then came crashing down.
with Project Natal.
In January, sales were up 13 percent over the year before, reported industry analyst the NPD Group, and that trend continued in February, with a 10 percent boost over 2008. The argument for why video games could be doing so well while jobs were disappearing by the six-figures? The long-bandied-about theory is that entertainment offers people a great value for their money, particularly when they can get dozens of hours of fun for the whole family for just the $60 it costs for a game like Madden 10.
But by March, all that momentum was gone and sales were through the floor, losing 17 percent over the year before. That soon became the trend as the numbers kept on going down, month after month after month. The theory that video games were recession-proof dissolved with the revenue figures.
But not all was bad. Even as the industry in aggregate was seeing the bottom line results of the recession, individual games and companies were smiling broadly at either immediate successes or future promise.
For example, in March at the Game Developers Conference in San Francisco, WebTV founder Steve Perlman and former Eidos CEO Mike McGarvey unveiled OnLive, a promising technology that could turn the industry on its ear by streaming first-run, console-quality games from top-tier publishers over the Internet. Then in June, Microsoft took E3, the video game industry's giant Los Angeles trade show, by storm with the formal unveiling of its futuristic hands-free motion-sensitive controller system, Project Natal. Primed to change the way gamers--and others--interact with their consoles, or computers, the technology was the hit of the show. It's not known for sure when it will be released or how, but rumors have it that it will cost around $50 and hit store shelves late in 2010.
Also a big hit at E3, where it was seen for the first time, was Beatles: Rock Band. That game, something that would have been impossible only a couple of years ago, even got Paul McCartney, Ringo Starr, and Yoko Ono to show up at Microsoft's E3 press conference.
If that was an unlikely event, it may have been only one notch less probable that what happened in September, when the PS3 at long last won a monthly sales crown, beating out the Xbox and the Wii in NPD's monthly sales report for the first time in the console's three-year run. But that was surely because of the August release of the PS3 Slim, a smaller--and more importantly, a cheaper, version of the console. For the first time, a PS3 could be had for less than $300--well, OK, it was $299--and things began to look up for Sony's beleaguered machine.
But Nintendo also got into the price-slashing game in 2009, cutting the Wii's sticker to $199 after being $249 since launch in 2006. And after a 2008 holiday season in which no one could find a Wii, the supply finally matched demand in March. By fall, the Wii had retaken its top sales spot and was expected to maintain it through the holidays.
Another bright spot was the record-shattering sales of Activision's Call of Duty: Modern Warfare 2, which became the fastest-selling piece of entertainment in history in November, racking up sales of more than $310 million on its first day alone.
Clearly, notwithstanding great news like that, there's trouble in the industry: thousands of layoffs, tumbling sales, studios closing, and a sense that if the holiday doesn't do gangbuster business there's going to be a bloodbath. In that, video games may not be unlike other industries. But given how rosy each of the major hardware companies keep saying things are, one could be forgiven for getting confused by the reality.
Among the casualties is ACES, producer of Flight Simulator, Microsoft's longest-running game. But the company says the game franchise will continue in one form or another.
In its Q3 earnings, the video game giant gave more information about layoffs it first announced in October. But instead of 10 percent, it's 11 percent.
Video games sales remain strong. Clearly people are spending money on something.
Who needs console wars when we can fight over whether Microsoft's new Project Natal is better than Nintendo's new Wii Motion Plus technology or Sony's new motion-sensitive wands?
A casual relationship between MTV President Van Toffler and Dhani Harrison, the son of the late Beatle George Harrison, paved the way.
At a press conference in Cologne, Germany, Sony finally unveils the PS3 Slim for $299 and announces a price cut on current PS3 systems.
Nintendo officially announces that the game console is getting a $50 price cut as of Sunday.
Although it's not a certified trend, the PS3's sales victory in September is seen as a harbinger of good things for the perennial video game console also-ran.
Electronic Arts makes some serious waves in the social gaming by acquiring Playfish for $275 million in cash and $25 million in equity.
Electronic Arts CEO John Riccitiello expresses some displeasure over the Nintendo Wii and his company's inability to yield a high return on investment for Wii games.
In the wake of a decision by Microsoft to ban up to 1 million Xbox Live members for illegally modifying their consoles, Craigslist is now flooded with sales for the devices.
According to Activision, its new Call of Duty: Modern Warfare 2 has broken the single-day sales record for an entertainment launch. In the first 24 hours, the new game earned $310 million.
With total industry sales down 19 percent from a year earlier, things are looking bleak as the holiday season gets under way.
Electronic Arts shuts Pandemic Studios facility, bought in 2007 as part of an $860 million deal. Shutdown follows announced cost cuts and layoffs for struggling EA.
Based on Thanksgiving week numbers provided by Nintendo, an analyst has concludes that the Wii appears likely to have far outsold the Xbox and PS3 in November.