Video game industry sales finally take a hit

March revenues for the video game industry dropped 17 percent from a year ago, the NPD Group reported Thursday, the first time in the current recession that the business has seen sales fall.

For the month, the analyst firm reported that the industry turned in total sales of $1.43 billion, down 17 percent from $1.72 billion a year earlier. Hardware sales were down 18 percent, while software was down 17 percent.

But while the numbers look poor, NPD analyst Anita Frazier said she attributed some of the drop to the vagaries of the calendar.

"While it might be tempting to jump to the conclusion that the sky is starting to fall on the video games industry given this month's results, it's important to remember that two very big things are different this year than last," Frazier wrote in a note accompanying NPD's report. "First, Easter fell in March last year whereas it fell in April this year, and last March included the release of Super Small Bros.: Brawl, which went on to become the fourth best-selling game in 2008."

Perhaps, but one game's fortunes are unlikely to be enough to turn around an entire industry, especially given that hardware sales dropped about the same as overall revenues.

Overall sales were also down 2.7 percent from February's $1.47 billion, and each of the six hardware platforms NPD tracks--Sony's PlayStation 3, PS2 and PSP, Microsoft's Xbox 360 and Nintendo's Wii and DS--had lower sales in March than in February. The PS3 and Wii led the drops, with 21.0 percent and 20.2 percent lower sales, respectively.

By comparison, the Xbox saw its sales fall between February and March, but less than the PS3 and Wii, and Frazier reported that Microsoft's console was the only one with good year-over-year news.

"While it's not unusual for March hardware sales to be lower than February," Frazier wrote, "I thought we'd see higher unit sales on most platforms. The Xbox 360 was the only platform to achieve a year-over-year sales increase."

Frazier also said Nintendo's numbers were noteworthy, given the effect of Super Smash Bros.: Brawl on the company's March 2008 sales.

"Wii and NDS hardware sales remained brisk, taking the top two spots for (March 2009) in hardware unit sales," she wrote. 'It's important to keep in mind that the (game's) effect from last year impacted hardware sales as well, so while the year-over-year comps are down for the Wii, the sales are still impressive."

Still, the Wii--the darling of the video game industry media since its surprise success became almost institutionalized--has seen some negative press recently.

In March, for the first time, the PS3 outsold the Wii in Japan, and many observers wondered if that milestone indicated that Nintendo's console's dominance had finally come to an end.

[BlitzBoy1120]

I don't think that the Wii's dominance has ended yet. Though I am a PS3 person, I don't see the PS3 really outselling the Wii on a month to month basis yet. I think the 17% drop was bound to happen, but it won't really take a toll on the games being made.

[kevsmail]

I think the Wii is reaching market saturation. There's been an entire pallet of Wii's at my local Costco for 2 weeks and it doesn't look like many have been sold in that time.

[IndIka024]

as a gamer, I can tell you sales are down because there are no new games lol... this is a dry spell man, of course March will not make as much as Novemver. In March I rented two games, Halo Wars and Resident Evil 5. Both those games are not purchase worthy in my book, RTS is fun but not a huge fan, and RE5 has no replay value, its a single player game with the option of co-op.. I'm no expert, but I can tell you that the release of Modern Warfare 2 will break records, so all you invester type mofos.. heads up.

[d3vildog69]

BS card on RE5 dude

Its all about co-op, i spent countless hours on that game with a friend, beating on hard, and veteran. You can play as chris and sheva. there is even the option to use ur own equipment on each char and trade. Upgradeable weapons. RE5 has tons of replay value

[IndIka024]

as a gamer, I can tell you sales are down because there are no new games lol... this is a dry spell man, of course March will not make as much as Novemver. In March I rented two games, Halo Wars and Resident Evil 5. Both those games are not purchase worthy in my book, RTS is fun but not a huge fan, and RE5 has no replay value, its a single player game with the option of co-op.. I'm no expert, but I can tell you that the release of Modern Warfare 2 will break records, so all you invester type mofos.. heads up.

[sonicdeath]

The WSJ has a much better take on these numbers. A lot of hit games came out last year from March to June. So comparisons will be off for a the next 2 quarters. Let's wait and see what the year looks like before we point too many fingers at the recession. However it is a brutal recession so everything will be impacted to some extant even though ideo games are still way ahead of most verticals.

[eldibujante]

As another gamer, I agree, there are not any good games right now, that's all. I actually bought RE5 knowing that is not my type of game because I couldn't find anything else worth trying.

[jfrdricks2009]

Maybe people just dont have as much discretionary income as before, OR they are playing the games they already HAVE... to be honest, nothing really exciting comes out during the summer months anyway...

[daOwenator]

What is Super Small Brothers: Brawl? Or did you just not bother to proof read this before making us all read it?

[Zoobie]

"Super Small Bros.: Brawl, which went on to become the fourth best-selling game in 2008."

How did I not hear anything about the 4th best-selling game last year? I guess I've been under a rock.

[BtmnHatesRbn]

Been playing video games since 1980. I've seen it all. These reports are worthless and useless. Games reached a highest point right before 9/11, and has failed, ever since, to equal those numbers. So much so that, when using actual revenue from UPC/SKU scan data, not NPD's made-up financial fiction, games were a losing business during 2003, 2004, and 2005. If the Xbox 360 didn't launch in late 2005, making Nintendo and Sony release consoles in 2006, the industry would actually be dead. Japanese companies are clean out of cash right now, as their economy is more collapsed that the American economy, and, as seen, people aren't rushing out to buy games and game related things. When if comes to putting a $0.99 hamburger in a person's stomach for a few days or buying a game, people choose the hamburger.

Also, I don't buy anything about PS3 selling. It's too expensive. I call BS on any such report, especially when I have personal e-mails from managers of GameStops, Game Crazys, and Walmarts (contacts I made over a decade ago for writing for a website...today it's called blogging) telling me that what websites like CNET's GameSpot and other sites report are totally contradictory to their actual numbers they look at day after day.

Wii is still selling. One local Walmart I visited twice in one day had put Wiis out on the shelf. I came back a few hours later. All were gone. So maybe people are only willing to spend their hamburger money on a Wii.

Also, casual is the new hardcore, and the so-called "hardcore" are like the so-called "mainstream" media: Wrong.

[Rolker]

One of the problems with NPD's numbers is that they represent only retail sales (as far as I know).
In the PC world (and also in XBOX live) a lot of gamers are buying their games online, in services like Steam. Although some people still want to own a "hard copy" for their games (myself included), Steam and other online services sales have been growing steadily with the years. These services usually don't report sales numbers, so they are not reflected in NPD reports.
I just bought Left 4 Dead for the PC on steam, and it was an enjoyable, and recommended experience.

[Zoobie]

Another problem is that NPD numbers don't include Wal-Mart numbers. If you look at Wal-Mart's last earnings releases, a lot more people have started shopping there lately.

[jean.luc.picard]

This article completely ignores one of the fastest growing new gaming platform: iPod touch/iPhone. It appears that their games are still selling like hotcakes!

[celticbrewer]

These numbers are all wang-waving BS. When reports like these come out, I usually see three different headlines from various websites. One says the PS3 is winning, the other that the Wii is winning, and one saying the Xbox is winning. One will take into account international numbers, some only US, some only from certain sectors/vendors. Who cares about sales figures other than the manufacturers? Also, can we get numbers that also include the re-purchase of a console by people who have had theirs die or needed to be upgraded (Elite)?

[Stefaninafla]

This once again supports the quote of the three types of lies: :"Lies, d**m lies, and statistics".

[sythara]

There arent any good games out right now, in fact there arent good games that have been released in recent past at all. Everything (mostly) thats released now is just a remake of a remake of a remake from a cookie cutter style. That tactic works for a little while, but now the market is oversaturated with crap and no company wants to make anything bold and new.

gah, whatever

[akita96th]

Well the price tags on most of these games will always be a factor in these times of uncertainty.
There is no reason why a small plastic disk should cost $50 + that is just plain greed and I do not feel sorry for the game manufactures for their insistance on gouging parents to make the kids happy