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.
The video games industry continued to defy general economic realities in February, posting a 10 percent year-over-year sales increase and a 10.5 percent boost over January.
For the month of February, the industry recorded sales of $1.47 billion, up from $1.34 billion a year earlier, according to numbers released Thursday by industry analyst NPD Group. And the February numbers also outpaced January's $1.33 billion. In February, software accounted for $733.5 million in sales, while hardware and accessories came in at $532.7 million and $207.1 million, respectively.
According to NPD, Microsoft's Xbox 360 had its second best non-holiday-season sales month since its launch, with 391,000 units sold. But once again, it was Nintendo that had the best overall performance. It sold 753,000 Wii consoles, as well as 588,000 DS handheld systems. Those numbers were up 10.8 percent and 15.1 percent, respectively, over January.
Sony's PlayStation 3 and PlayStation 2 didn't have quite as successful a February. The PS3 moved 276,000 units, while just 131,000 PS2s were sold. However, those figures did represent a 35.8 percent and a 29.4 percent jump over January. In February, Sony's PSP sold 199,000 units.
Nintendo also dominated the software sales side of things. Six of the top 10 best-selling titles in February were for either the Wii or the DS, including the repeat No. 1 performer, Nintendo's "Wii Fit.
NPD analyst Anita Frazier said March looks good for the industry as well, despite the recession, because of titles such as Halo Wars, Grand Theft Auto: Chinatown Wars, Resident Evil 5, and more.
"The sheer quantity of great content coming to market early in the year should keep industry sales humming throughout 2009," Frazier said in a statement.
Video game industry sales grew 9 percent, year-over-year, in December, and were up 19 percent for the year, according to the latest figures from analyst firm, the NPD Group.
Overall, the industry saw sales of $5.29 billion in December, the first time it had ever cleared the $5 billion mark in a single month, according to NPD analyst Anita Frazier.
And once again, the video game industry far outpaced general retail sales, which were down 2.7 percent from November. By contrast, video games were up 81.8 percent over November's $2.91 billion.
Leading the way again was Nintendo, which sold 2.15 million Wii consoles and 3.04 million DS handhelds. Microsoft moved 1.44 million Xbox 360s, and Sony, once again, lagged behind, selling just 726,000 PlayStation 3s, 410,000 PS2s, and 1.02 million PSPs.
It was the first time, NPD said, that any video game machine--the Nintendo DS--had topped 3 million units in a single month, evidence perhaps of consumers wanting a good bargain at a time when resources are tight.
For the year, NPD said that the industry totaled $21.33 billion in sales, up 19 percent from the $17.97 billion it recorded in 2007.
All told, the numbers provided further evidence that video games may be one of the very few economic segments that are, more or less, recession-proof.
Of course, the industry's success isn't universal, and there have been a large number of layoffs at video game companies, just as has been seen across the economy as a whole.
"We get asked a lot why there are so many layoffs and studio closings occurring in the industry when it has just realized another record-breaking year," said Frazier in NPD's release of its December numbers. "This is not a case of the rising tide lifting all boats. The increases are not being enjoyed equally by all manufacturers and publishers."
The video game industry had better thank its lucky stars that hard-core gamers do what they do.
According to a report issued Monday morning by industry analyst firm, The NPD Group, the most active group of players, which it termed "extreme gamers," devote more than a full-time job's work week to their avocation. But they don't get insurance benefits for their efforts.
Rather, NPD's "Games Segmentation 2008" report explained, extreme gamers put in an average of 45 hours a week playing games, and, even better--for the video game industry's coffers--bought a whopping 24 titles in the last three months.
True, these committed gamers make up just 3 percent of the 174 million that NPD said play on PCs or Macs or dedicated video game machines. Still, that means 5.22 million people out there are putting in serious amounts of time gaming away. And if you stop and think about the dollars they're spending, if they're buying 24 games every three months, it's kind of breathtaking.
The NPD report identified seven different segments of gamers, including our extreme friends. The others include 9 percent who are "avid PC gamers," 17 percent who are console gamers, 14 percent who are online PC gamers, 15 percent who are offline PC gamers, 22 percent who are "young heavy gamers" and 20 percent who are "secondary" gamers.
... Read moreSony on Tuesday announced that it is opening up its PlayStation Store--an online source of downloadable games and other content--to PC users. No longer will the store be the exclusive province of owners of Sony's top-end video game console, the PlayStation 3.
PlayStation Portable users will now be able to download games via Sony's PlayStation store.
(Credit: CNET Networks)The company said that the move means that PlayStation Portable users will now be able to download games via the store. Those games include "classic" PlayStation games, as well as a series of new PSP games available only through the PlayStation store. Existing PSP games will also be available.
Among the store PSP exclusives are Syphon Filter: Combat Ops and Beats, both of which cost $9.99 on the store.
The move is probably a good one for Sony, since it means that PSP users will be able to get access to games without having to go to a store to buy them. And for the company's video games unit, which is in strong need of a boost come this holiday season, any expansion of its market is a plus.
However, there's no way to know how much additional revenue the move will produce, and even then, how it will be offset by any overhead costs associated with the expansion of the store to a new medium.
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