Video game sales revenue plummets 31 percent

Revenue from U.S. video game sales dropped 31 percent to $1.17 billion in June, compared with $1.7 billion a year earlier, according to data released Thursday by market research firm NPD Group.

The ongoing economic recession and a lack of blockbuster game title releases were blamed for the drop, the fourth decline in video game sales in as many months.

"This is one of the first months where I think the impact of the economy is clearly reflected in the sales numbers," NPD's Anita Frazier said in a statement. "This level of decline is certainly going to cause some pain and reflection in the industry."

Hardware sales suffered the greatest hit, falling 38 percent to $382.6 million from $617.3 million in the year-ago month. Only the Microsoft's Xbox 360 game console managed to record a slight sales increase, while Nintendo Wii sales dropped 45 percent, and the Sony PlayStation 3 dropped 59 percent.

Game sales revenue suffered the second largest hit, falling 29 percent to $625.7 million from $875.8 million a year ago. Sales of video game accessories also declined, falling 22 percent $158.2 million from $202.8 million a year ago.

Once seemingly recession-proof, the game industry has fallen on hard times. Video game sales dipped below $1 billion last month for the first time since 2007.

NPD also suggested that part of the decline may be due to gamers moving to online gaming, but said that trend did not represent a significant threat to console makers.

"While some of the decline in retail sales could be a migration on the part of consumers to acquiring content via digital distribution, our reports on downloads and subscriptions reveal that it's not yet having enough impact on the console market to be an overly meaningful factor in the retail down-turn," Frazier said. "That said, there are increasing avenues for consumers to game, including via mobile devices, and it's clear the industry is sorting through how to manage all these opportunities while deploying resources appropriately."

[holyreki]

In my opinion, it's the industry's fault, not the recession's fault.

The PS3 NEEDS a pricecut to compete. Beating a dead horse with this one.

Publishers NEED to stop waiting until the holiday season to release good games. If they did a better job staggering releases they would have more consistant sales and would most likly sell more software because their game wouldn't have to compete with all the other great titles being released at the same time

[6stringluke]

Absolutely agree with the PS3 comment.

However, the gaming industry are doing things no different than, say the movie industry or tech companies. Holiday season is when people are much more apt to spend their money. Hence it would make more sense to release their "crown jewel" products in a period when they have more potential customers.

I think games should come down to their PS2/Xbox prices. I know some games are already released at $49.99, but surely that should be the standard for even the higher end games.

During these trying times, buying used or renting from Gamespy or Blockbuster is just much better value because games are so expensive.

[krisr2005]

I agree with both of these points. The only thing I fear with the PS3 is that it simply cannot afford a pricecut. Again, that's no one's fault but Sony, but obviously they are looking for a reasonable rate of return, and apparently their rationale is that dropping the price $50 or $100 isn't in their best interest on a gross profit margin as opposed to what they are receiving at their current price point. And that's hard to believe in my opinion due to dismal sells, but what other reason could they have for not dropping the price?

As with the publishers staggering release dates? C'mon, these guys should have been doing this years ago. Enough with the fourth quarter jumble of releases, spread em out!

[6stringluke]

Oops, I meant Gamefly not Gamespy.

[naterandrews]

Sony has a do-or-die situation on their hands. Sure, Cell and Blu-Ray are high expense items for the PS3. But a cheaper model, say, sans the hard drive and wireless would help to not only gain more sales, but contrast the value prospect the higher end model delivers.

While it is true that some people do not truly comprehend the full value prospect the PS3 delivers, this cheaper version PS3 Lite perhaps, would illuminate these differences while maintaining the Blu-Ray value add. Many companies that have higher priced, premium products often release a cheaper version to highlight these differences, successfully.

If Sony were to put out a hard drive, wi-fi 'less system, how much would you expect to pay? Do you think it would be a big hit?

[freemarket--2008]

Sony can't afford to cut the PS3 price much more. As far as I know, they are still losing money on each unit. The need to do whatever it takes to sell more games. They should update some of the classics for HD and release them at a decent price. They also need more innovative titles like LBP.

[samkass]

I wonder what impact $1 to $5 iPhone games are having on the $30 to $50 console game market.

[naterandrews]

I'd assume they would have very little impact. Nintendo rules the mobile roost with the DS/DSi, and Sony is faring well enough as well. Consumers have shown their willingness to pay fairly premium prices for their mobile games, and while iPod and iPhone offer a similar experience the impact to consoles will be negligible.

That's not to say that iPod/iPhone gaming wont be lucrative in its' own right, but no mobile/handheld platform can disrupt the home consoles enough to negatively impact sales. The true measure of success will be how well these "i" games compete with the aforementioned counterparts in terms of profit, support, and sales.

[Kwasiowusu]

June NPD Hardware Year on Year increase/(decrease):

PlayStation 3 (-59%) (MGS4 last year)
PSP (-52%)
Wii ( -46%)
Nintendo DS (-2%)
PlayStation 2 (-1%)
Xbox 360 +9%
Only the 360 was up year on year for June

Jan through Jun totals increase/(decrease):

| 2008 2009 | Difference
PS3 | 1608K | 1120K | (-488K)
360 | 1341K | 1621K | +279K
Wii | 3483K | 3024K | (-459K)
PSP | 1483K | 919K | (- 564K)
NDS | 3186K | 4102K | + 916K
For the first half of 2009, the Xbox 360 hardware sales increased 20%, making it the only home console to register positive growth this year . The DS is up 29% YTD as well. All other consoles are down YTD.

[holyreki]

I'm amazed how well the PS2 continues to sell so well, even 2 years after the PS3.

[baconstang]

Great, maybe these losers will do something useful with lives.

[BtmnHatesRbn]

Can't. Their overweight bodies keep the house at the basement level balanced because the ground upon which they live got used to their excessive mass.

[naterandrews]

Considering that games cost the most they ever have, Sony and Nintendo are going against wishes for price cuts, and almost every 1st and 3rd party is pushing peripherals, this is no surprise.

Gaming in this generation is prohibitively expensive and gamers are pushing back against the industry to show that they?ve had enough.

With $400 Playstations, and $60 games not being enough to fuel the fires of this segment of the entertainment industry- we now have to fork over extra cash for snowboard, ?balance board?, race wheels and proximity sensors to ensure that we can play the game in it?s full glory?

There?s a reason many gamers haven?t switched over from their more value-friendly prior gen. systems (especially the world?s largest install base in form of the PS2)
Sadly to say, this alarming trend of ?more more more? isn?t likely to slow down. As games become more intricate, they inherently are more expensive to produce. I agree with many analysts, expect $70 games to become the norm in the next generation- and downloadable games to become more mainstream. While preserving more profits by cutting the retail channel, don?t expect game studios to pass the savings onto you. Add-in online subscriptions and more peripherals (what a GREAT trend) and gaming looks to become more of an ?investment? instead of casual play.

[BtmnHatesRbn]

Nobody's forcing you to buy the extra stuff.

The generation is dead for Sony because they same games are released again for the third generation in a row, and the console, after passing the 2.5 year mark (meaning half the generation is over for its lifespan) and still ZERO success, Sony messed up bad. I actually hang out with around 200 gamers from the Los Angeles and Las Vegas area. Only two people have a PS3. One is a Todd from Code Monkeys clone and the other is an idiot who has no money, more Liberal than Obama/more Marxist than Karl Marx, and bought it for only one game: GTA 4. Today, he's homeless and we laugh and make fun of him. He also refuses to sell the PS3 in his cart of stuff.

Other than that, I know about half of these guys I work/hang around with refuse to acknowledge PS3 or PSP, and consider only the iPhone, DS, Wii and 360 as the only gaming consoles existing right now.

[plbyrd]

None of this holds water. The reason the industry is in decline overall is that the games have sucked for the last several months. The system that is doing well, XBOX 360 isn't totally dependent on games. The Netflix integration is the smartest move Microsoft ever made and soon a Zune Pass will work on the XBOX 360 as well. Plus, of the current consoles the XBOX 360 has the best exclusive games and the multi-platform games play the best on the XBOX 360.

Not only was Microsoft first, they were best. The quality issues of the first generation are behind them and the hardware and software now are very, very, very solid. Microsoft focused on entertainment, Nintendo focused on kids, PS3 has no focus. Guess who's got the long term legs?

[Shlomi1995]

@BtmnHayesRbn


You seriously think SONY aimed for a five-year lifecycle for their PS3 product?
It seemed to me like 'PS3 will have a 10-year life' was rapidly becoming SONY's motto.
You seem sadly misinformed.


BTW @ plbyrd

The XBOX 360 focuses on entertainment? Are you trying to prove your wisdom to us? You think the PS3 doesn't focus on the exact same thing? Entertainment; in the form of movies, TV shows, music, and games playback, and storage room for video, music, photo and game content, as well as streaming those types of content to and from other devices, is something not only the XBOX 360 focuses on, but also the PS3.


Your claim ('Microsoft focused on entertainment, PS3 has no focus') is invalid. As to your last sentence - 'Guess who's got the long term legs' - that is yet to be seen, but fact is that the PS3 has the most future proof, highest-end technology and capabilities.

[baconstang]

Don't forget to invest in a "Lazy Boy".

[imkain]

In my opinion I feel that the only game industry leader that is losing the most during this economic downturn is Sony. Sony released the PS3 at the start of this recession with an outrageous price point. Most fanboys and devout followers jumped onto the band wagon early, only to be burned by the absolute disregard to the release of video gaming titles. The Xbox 360 had it's issues too with the RRoD (three red light salute) and hardware issues. The fact that the gaming industry has only lost now during the recession can be taken as a good sign though...it means that the industry is still in better condition than any other commodity on the planet. It is unfortunate though that most games these days don't have a lot of meat and potatoes like they did back in the day, who remembers beating Super Mario Brothers in less than a day? You couldn't...it would take at least a solid week of playing...now your lucky to open up a brand new game and have it finished by dinner. To me content is more important than flash...they need to release games with all the fixings and not keep releasing titles that will have you finished with them in 4-7 hours. Oblivion is a fine example of a wonderful game that will keep you coming back for more. Fallout 3 was similar, but is still too short in my opinion. Now it may seem that I went on a tangent back there...but it leads back to the same topic. Games need to have more content and more time spent playing them than time spent saving for the next best game. Price point needs to come down on games too. I believe that there should be a cap of $49.99 for all games that CAN NOT be updated via online updates. Other than that example they should be able to charge at least $54.99 and no more. Sorry if my conversation may be incoherent, a little tired I am. Please enjoy the rest of your day and thank you for reading my rant.

[BtmnHatesRbn]

Don't compare the original Super Mario Bros. with Fallout 3 or some Oblivion title, as these are long not from learning the skill to play, but are designed to be stallers with drawn-out and long-winded play. Super Mario Bros. is an action title that required a constant perfection of skill to certain level. It was a 100+ hour game because of the desire to learn and improve one's self at the game, as compared to a game that can be mastered from previous versions (prequels and using other series' concepts and ideas) and placing a scenario where the movement is essentially the same, whereas Super Mario Bros. requires different moves almost scene for scene. The thing is, Super Mario Bros. will be remembered 200 years from now, and Fallout 3 and that Oblivion game will be abandonware within the next five years, then forgotten and ignored except by five people in 15 years.

[cgharlow]

I think the game industry is feeling the change in customer base. The hard-core gamer is in the minority, and they are running out of money. It took awhile, but the average consumer is starting to understand that picking up a $400 console and then paying $60 for a game that will likely entertain themselves / their kids for only a few hours is a losing prospect. For $170 and $35 (max), they are picking up the portable system that they can play on the run (or keep the kids quiet), or spend $100 and $40 (max), they are picking up a home console that (realistically) is good enough. Even more interesting, since most people already have a home PC and a decent internet connection, there are a plethora of decent free or cheap on-line games (some are actually pretty good) that provide entertainment for many, many hours.

The money story is strong enough on its own, but add in the recession, and the game industry is going to reel until they understand the market is different for at least another year...and it may not get a whole better until the game industry starts putting out better content for the prices they charge.

[BtmnHatesRbn]

I have to agree. Seems all the normal people I know has a Wii, DS, and plays Flash or JAVA games in a browser at iWon, Pogo, etc. And on the Wii, a mediocre game like The Godfather becomes fun because of the Wii controls, as an example. The new gaming majority understands this, as you've stated.

[metalmike5.]

All of us gamers have finally put the sticks down long enough to figure out that we are in a recession and that we need to watch what we spend.

[inachu1]

I think it has to do with the fact that no more flashy gimmicks in some new graphic driver update.

So nobody will buy a new game as most games already now exploit every potential facet of DX10.

Perhaps if the developers would just make more maps for older games and redouble back to make sure old complaints are fixed in patches they refused to patch in the past.

Kinda like a good example is: I installed every patch and map level for BF2(battlefield 2) but for some reason Kubra dam is still missing.

What is the determining factor to get this map pack in the game?

Little things like that that game developers refuse to address.

[BtmnHatesRbn]

The problem today is that the developers are the PlayStation generation, whereas the PlayStation/N64/Dreamcast games were done by the Nintendo/Genesis generation, and their supervisors were the gaming pioneers themselves. These people have all moved on, either retired or out of gaming and into computing, and that leaves people who finished college around 2001 that played nothing but PlayStation to learn their development and can't think outside that box.

Luckily, companies like Nintendo is still administered by many legacy employees, while companies like Konami have had employees come and go like a McDonald's. Also, isn't it strange that in a 1998 interview in EGM with Kojima show's a man in his early 60s and all the pictures now shows a picture of a man in his 30s? Talk about phony over at Konami!

[zincmann]

Thats why there are console mods....firmware mods etc.

[BtmnHatesRbn]

Okay, which normal gamer actually mods a console?

[Sardonik]

Steam sales are still going strong i'd imagine. Wish they'd actually release the statistics on sales.

[BtmnHatesRbn]

Is Steam really doing that well? Or is it just something that everybody talks about and the user base gives the illusion that it's doing well? Maybe there's a real reason Valve keeps that to themselves.

[Sardonik]

Steam had like 13 million accounts in 2007 and I bet they have a whole lot more now.

[edcase512]

With the general decline in quality and originality and the massive increase in "gimmicks", I for one suspect this trend is indicative of the state of the industry rather than the state of the economy.
Much like television ..the games industry churns out rehash after (buggy)rehash.
I'll stick to the PC segment and the independent (and smaller foreign producers) games. At least there there is still some care and attention paid.

[BtmnHatesRbn]

With Micro$oft's Games for Windows requirements for Windows 7, kiss that concept good-bye.

[Farthing Haypenny]

I find the PC segment still offers great value. Though there tend to be slightly fewer games that interest me produced now than in years past, I'm never without something that fascinates me. The value of the games themselves is outstanding, I probably get over 100 hours out of an average title purchased at an average price of around 20$. The secret is to buy older games (on Amazon or wherever) and run them on an older machine. They are fully patched and often come packaged as gold editions with all the add-ons for 20-30$.

[dreamhunk]

we all know how much the media loves pc gaming! Pc gaming is mussuling consoles out of business hthese days. I guess hardware companies are disperate as console sales go on a decline

http://www.shacknews.com/onearticle.x/53403

http://downloadablesuicide.com/2009/07/16/pc-gaming-its-problems-stem-from-mistreatment/

[superdynamite]

From the front they look real. From the side they look like implants. Decent body. Her butt and thighs or OK.

Body 7/10
face 6/10

total 6.5 (on a world scale. Cindy crawford at 23 years old would be a 10)