Video game sales in free fall
In a stark reversal of the trend on display just a few short months ago--when general retail sales were plummeting even as the video games industry was still showing growth--cautious optimism in retail is now being offset by many losing months in video games.
In July, according to industry analyst the NPD Group, video game sales fell for the fifth straight month, and the year-over-year numbers are striking: In July, the video games business posted sales of $848.9 million, down 29 percent from $1.1 billion a year earlier. Year-to-date sales, reported NPD, were at $8.16 billion, down 14 percent from the same time period a year ago.
And things are only getting worse. While the industry's June numbers were down a full 31 percent from a year earlier, they still topped nine figures, coming in at $1.17 billion in June. But that means that in July, sales were down 27.4 percent from just a month earlier.
It wasn't that long ago that many people were making the argument that video games--because of their relatively low cost and many hours of entertainment value--were seen as close to recession-proof. But now, it would be hard for anyone to make that case.
Indeed, NPD analyst Anita Frazier wrote in a report Thursday that, "In order for the industry to come in flat or slightly up for the total year, the back five months of the year have to come in 11 percent (or more) higher than the last five months of last year."
That would seem to be a near impossible task, given the recent trend. But Frazier did throw the industry a bone: "While year-to-date results are weak, there are some big titles set to be released over the next several months, including Madden (10, from Electronic Arts) this month, which should help spur sales. The worst...should be behind us, and looking beyond August, we have The Beatles: Rock Band, Halo 3: ODST, and of course, Call of Duty: Modern Warfare 2 to look forward to."
Not to mention Guitar Hero 5.
One thing was also made clear in NPD's July report: sales weaknesses in the industry are being seen across the board. However, hardware led the charge, with a drop in sales of 37 percent ($280.94 million in July, 2009, as opposed to $447.71 million a year earlier). Software and accessories were down 26 percent and 12 percent, respectively.
Microsoft was quick to jump on what may have been the only bright spot in NPD's report: that its Xbox 360 was the only console to deliver growth over a year earlier. In its own report, trumpeting NPD's numbers, Microsoft pointed out that the Xbox has turned in 17 percent growth for the year over the same period in 2008.
And while Nintendo's Wii still leads the pack among the big three consoles (the Xbox, Sony's PlayStation 3, and the Wii), its lead has shrunk considerably. In July, consumers bought 252,200 Wiis, versus 202,900 Xboxes and 121,800 PS3s.
All in all, it's hard to be optimistic about the industry's prospects, though, as Frazier pointed out, there are a slew of big titles coming down the pike that could drive big sales. Still, the same is true every year, and as a result, there are few who could argue at this point that the video game business is facing what may be its biggest crisis in years.
Daniel Terdiman is a staff writer at CNET News covering games, Net culture, and everything in between. E-mail Daniel. 
Traditionally, blockbuster video game titles are all released in the fall, targeting holiday sales, and it appears 2009 is no different.
But 2008 WAS different. 2008 showed sequels in major franchises like Mario Kart, Super Smash Bros, Grand Theft Auto, and Metal Gear Solid all released in the first half of the year.
I think it would be more instructive to compare 2009's sales to 2007's than 2008's.
the socialists will turn the game industry into
The Peoples Game Industry
(bailouts)
I'd wonder how the sales of the well developed games are doing?
My guess is that people are just being more careful which games they now buy... which has hurt a lot of the big titles that were just some new graphics pasted on the same poor engine and quickly ported to all the platforms. I actually hope these companies/title go under. The good games have been primarily coming from the smaller studios and exclusive platform titles. I'm guessing these games are still selling reasonably well.
RPG's are the worst offenders. Play through Fallout 3 in 40 hours and you never play it again. Spend 20 hours on Halo 3 then spend another 200 playing online. Which one did I get my money's worth?
The problem is there aren't any games worth buying. It cost so much money to develop a game that publishers don't take risks anymore. All we get is endless sequels churned out by the same big development companies. COD5, COD6, Madden 10, Mario 35, etc. Tired of sequels. I'm not paying $60 for a roster update for Madden 10, no way.
Gamecube titles were between $50-60 when the console launched.
Games will always start around $50 or more. They have for decades.
"Give away the razor sell the blades" has been the video game industry's philosophy since as early as 1989.
They probably can't realistically lower the prices much on games considering the development costs that go into them, unless they could count on selling a lot more copies than typical games currently do. Just look up what average development costs these days... average number of copies sold... and do the math. At $30-40 a lot of games would end up losing money.
The key is for studios to develop actual compelling titles that do a good job of utilizing what the platform offers (in terms of graphics, gameplay, controls, etc.). Many of the exclusive titles on the PS3 (and I'm sure on Xbox as well) fall into this category. They seem to typically sell plenty of copies to make a profit.
The problem is that many companies seem to be shoveling out cr*p like BloodSplot 54 (the sequel to BloodSplot 53 of course) that they spent 10 hours developing, 2 hours porting, and $20M on marketing. That just isn't going to work anymore in a down economy. Kiddies simply aren't going to have as much money to waste to be able to spend $60 for a game that gets old after 2 hours (if it was ever actually fun to play in the first place).
Movie costs to produce/promote and cost of ticket in real dollars -1929
Video games cost to produce/sales price in real dollars - 2009
Media IS our Economies backbone today has been for decades, why would its mechanisms of production not suffer?
Movies in 1929 were new to our industrial world/urban world that had formed for the previous 50 years.
VIdeo Games are just another form of mass market entertainment media today. with 30 years of costs built into their 59.99 values and 100 million dollar production costs.
Now --- inexpensive web games...or casual games sponsored on the net.. they seem to be doing well..just like the movies of 1929 perhaps?
These stats simple iterate the fact that there are NO BIG TITLES coming out this year. Last year there were like 10 games I wanted/got on the 360, and this year I have bought 0 because there is nothing good coming out.
The PS3 supports every media codecs the 360 does plus a few more. http://gizmodo.com/5096103/a-complete-guide-to-playing-video-files-on-your-ps3-xbox-360-or-wii
The PS3 uses a REPLACEABLE laptop hard drive. I put a 320gig in mine for $89, it takes about 5min to easily replace. You can put a lot of ripped movies onto a 320gig drive. They now make 1TB laptop drives, and 500gig as well. What size drive can you get for the 360? 160gig that probably cost $150 from MS, and then you cant copy anything to it.
The PS3 is silent compared to the 360. The PS3 has Blue Ray. The PS3 does not have that horribly stupid interface that the wii and 360 have.
On the PC side they don't know what hardware the user has so they can't optimize as well.
Walled-gardens have their uses, just ask Apple.
1) My 360 is fairly silent.
2) The 360 interface is great.
3) There's no need to put ripped movies onto a 360 hard drive. I rip movies to my PC hard drive and stream them to my 360 using Media Center...it works very nicely.
4) I don't care about Blu-ray.
Also, since I have a TV tuner card in my PC, I use Media Center as a DVR (pretty easy) and stream the recorded shows to my 360 to watch on my TV. It's awesome. Like TIVO, but FREE.
DSL or dial up you might as well skip Streaming Video because you will get nothing put pause,pause,pause and a bunch of scrambled audio. I have a Widescreen 120 HZ HD TV and i aint waisting it on streaming video unless it's a one time deal with a comedy movie or horor film. Anything that has alot of special effects and is shot in true HD is going to be viewed bluray.
Well, they still sell new PS2s, and GameStop has hundreds of games for under $15... I'm wondering if these sales figures count used game sales. I buy 10 games a month, and non of them are new.
BUT, I do buy tons of games on steam when they have their weekend sales. When they regularly discount their games 50%-75%, you can't NOT buy the games, it's such a steal! Valve has even said they make tons of money with these regular sales (otherwise, you wouldn't see them do it so often).
Other game publishers should take note, discount the games and the sales will come. It will also reduce piracy and then that will reduce the perceived need for DRM so it's a win for everybody.
Also, with Apple becoming a player in the game biz with their ipod touch/iphone and their free or $0.99 games, cheap quality gaming is becoming common.
The $60 pricetag for games needs to go away now.
It will be interesting to see the numbers when CODMW2/ Halo 3 ODST / Thief 2 and other innovative titles are released within a relatively short span of time
Then you have the Wii. "I played it a lot when I first got it, but now I hardly ever play" is what I've heard from more than one person who owns one.
All the headlines months ago were saying it was cheap entertainment in a recession boosting sales. It sounds like stuid reasoning then and it still does now. Just re-publishing sales figures and then adding some second hand opinion is NOT reporting!
When its freezing cold out I would rather play a game in my basement on the big screen. When its warm outside my PS3 collects dust, while I am fishing!!!
Its lead in total units sold is unlikely to have shrunk at all. Maybe its per month sales lead "has shrunk considerably, " but last I checked it dominates total units sold by such a large margin no monthly slip in sales will probably ever have any real effect. Now if they could just get all those people to buy some games...
It's overall lead over the HD consoles(360/PS3) shrunk by 72,500 in July.
" but last I checked it dominates total units sold by such a large margin no monthly slip in sales will probably ever have any real effect."
Oh yes it will.
Wii sales were down a massive 55% year on year in July alone, while the 360 essentially stayed flat with last year's July sales. If things continue at that rate, the 360 will easily outsell the Wii in September with the launch of ODST. If the PS3 gets its much rumoured price cut this month with the introduction of the PS3 "slim", there is a pretty good chance that both the 360 and the PS3 will outsell the Wii in September.
72500
I don't think any of that nonsense is going on now.
Look for Wii year on year sales to continue dropping for the rest of this year, and for the 360 and maybe even the PS3 to start outselling the Wii towards the end of the year, when the PS3 gets it's price cut.
Of course the fact that the gaming industry is too busy trying to get into the PC market doesn't help either. Dont get me wrong, i love my pc for gaming, watching movies and doing everything on it. But i still have a television, because i don't like to PC on my TV, and i don't like to TV on my PC. I learned that from my all in wonder.
Thats like saying that a laptop will replace a pc.
So console makers take note, bring back the console...
oh and of course you apple lovers, the iphone will never take a byte out of gaming.
Back in the day, before there was such a thing as a patch, you had to release the game so that it works out of the box. Now game releases are dictated by marketing people or the management of some conglomerate that views the game division the same as the toilet paper division, a widget that makes money.
they're not going to sell them if they dont release them
-O
They keep releasing crap over and over with a higher number stapled next to the title, but the result is the same game as the previous version. There is nothing bad about sequels. But that sequel has to be a massive improvement (or different) to its predesessor. Take Fallout 3 for insatnce, its a huge improvement over Fallout 2 (don't count the other knock offs as actual fallout games).
People want cheap entertainment these days, watch something blown up and blazing fireball. Gamers used to line up chanting 'redrum' for next shooter game at the game store. But the market is oversaturated with same crap and no one wants to buy it anymore. Remind you of mid 80's?
People need very deep games that will entertain you for long time, something that will be worth downloading (and maybe paying for) an DLC or expansion. We need Hearts of Iron type game for all genres.
- by arcadefx August 14, 2009 4:34 AM PDT
- When was the last time you bought a game? My last purchase was Red Alert 3. I was buying a game per month and stopped. It was not a money issue, is was not the fun factor, for me it was the work factor. Work has picked up so much I don't have a lot of time to play. It's true companies are pulling in here and there and so are consumers.
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- by Sardonik August 14, 2009 7:38 AM PDT
- Why would you buy the orange box for the 360? I mean seriously.
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Showing 1 of 3 pages (78 Comments)My last 360 game was Half Life, PS3 - Mortal Combat/DC Universe(sp), Wii - Wii Music (my wife bought Wii Cheer). My iPhone has gained the most titles -- I regularly buy on it.
I even have an account on Champions Online and although I like it, I just don't have hours to dedicate to it.