US Game Sales Slump Continues, Down 29%

[Emabulator]

According to the latest NPD report, the game industry's year-over-year sales numbers suffered a double-digit decline for the fifth straight month. GameSpot (http://www.gamespot.com/news/6215273.html?tag=latestheadlines;title;1) has the story:

Combining hardware, software, and accessory sales, games raked in $848.90 million for July, down 29 percent from the previous July's $1.19 billion take. Software sales were off more sharply than analysts expected, suffering a 26 percent drop to $436.99 million. Rough as that number was, gaming hardware performed even worse, down 37 percent to $280.94 million.

Hardware sales were down across the board, with the usual sales order well preserved. The DS topped all hardware with 538,900 units sold, followed by the Wii with an uncharacteristically earthbound 252,500 systems sold. The Xbox 360 was off from its July 2008 total by less than 2,000 systems, selling 202,900 over the month. The PSP, PlayStation 3, and PlayStation 2 brought up the rear, selling 122,800, 121,800, and 108,000, respectively.

[gzsfrk]

I can't imagine where the idea that the games industry is recession-proof came from; more wishful thinking than anything else, I'm sure. The fact is, games are a luxury (albeit a relatively affordable one compared to most of the other frivolities people enjoy). And during a recession (particularly a severe one such as we're currently experiencing), purchases of luxury items declines. It's just a fact.

There's never been any solid reason to assume that videogames are any different. They're obviously going to be less impacted than, say, yachts or high-end sports cars. But the simple economic model is still there, the reality of which dictates that as more and more consumers become become unemployed or work for reduced pay, there will be less money to spend on "fun" stuff as a greater percentage of their income gets redistributed to essentials (not the least of which are energy costs, which have exploded over recent years).

Success during a severe economic downturn should not be measured as maintaining sales growth; rather, it should be based upon a companies ability to maintain either a positive cash-flow, or at the very least to keep red ink to a minimum till times get better in the midst of a challenging environment. Wall Street are a bunch of idealistic, short-sighted morons (stating the obvious, I realize).

[TeeCakes]

I'm a little surprised at how high the PS2 figure after all this time, TBH.

But yeah, Wii's sales have definitely bottomed out. A new SKU ala the DSi (the Wiii?) might have to come out @ 199.99 by the holidays so Nintendo can keep rolling in dough.

[rulyblue]

This is the summer, thus people don't buy as many games and consoles due to vacation. There is also a general game drought during the may-july months.

[Rafer]

I can't imagine where the idea that the games industry is recession-proof came from; more wishful thinking than anything else, I'm sure. The fact is, games are a luxury (albeit a relatively affordable one compared to most of the other frivolities people enjoy). And during a recession (particularly a severe one such as we're currently experiencing), purchases of luxury items declines. It's just a fact.

There's never been any solid reason to assume that videogames are any different.

Previous recessions hadn't affected the video game industry, that's were the idea that games were recession proof came from.

And maybe declining sales would have happened without the recession, we're just seeing the effect of the Wii bubble bursting. The industry has gone through rough spots before and so it could be coincidental that this is happening during a recession.

[Meusli]

The releases this year have not been as exciting as last year as well, I am still trying to finish everything in time for October.

[bskeillor]

Wii sales have bottomed out? They need to reduce the price?

They are still outselling their freaking rivals!!!

That being said, when the PS3 drop is announced they probably need to get the Wii to $199 or it will truly bottom out.

[rulyblue]

As of now the Sept-Nov titles will change the numbers around, as usual. I'm sure 75% of us plan on buying a game a month at least and for multiple systems. I think that's 100% good. Arn't statistics wonderful. I trust them completely. Do NDP reports calculate MMO's and DLC?

[Justin_Bailey]

I can't imagine where the idea that the games industry is recession-proof came from; more wishful thinking than anything else, I'm sure.

Wall Street are a bunch of idealistic, short-sighted morons (stating the obvious, I realize).

Wall Street is full of morons, you'll get no argument from me, but video games are definitely weathering this recession much better than other industries. Just not in the way the Wall Street morons had hoped.

Instead of buying new, full price games, gamers are turning to GameStop (who has been putting up record numbers) and buying used. They are also hitting up eBay (has anyone else noticed eBay's game category is quite stuffed with games that are even a few weeks old?) and Gamefly (waits for new releases are much longer than last year).

And thent there's the fact that a year like 2008 comes along once in a generation. Super Smash Bros Brawl, Mario Kart Wii, God of War PSP, Grand Theft Auto IV, Wii Fit, Lego Indiana Jones, etc, etc, etc. The entire year was packed with big releases in a way that is not happening in 2009.

[TeeCakes]

They are still outselling their freaking rivals!!!


But the PS3 is making more money off revenue now, for the first time in a calendar month, than the Wii. This is unprecedented.

The Wii used to outsell the competition by 5:1, now barely managing to stay ahead by a few thousand units? Yeah-- definitely time to shake things up to keep the train moving, IMO.

[bskeillor]

More revenue does not equal more profit.

[greenapple]

This is the summer, thus people don't buy as many games and consoles due to vacation. There is also a general game drought during the may-july months.

The numbers are for decline from the same time last year.

Blaming it on an a recurring annual event is the wrong thing to do. Shockingly, it was summer last year at this time, too.

Rather, these type of numbers raise the question of what is different from this year as compared to last year. As discussed above, the drawn out recession seems the best answer.

[LilAbner]

More revenue does not equal more profit.

Took the words right out of my fingertips. :)

[vherub]

the madden numbers will be a good sign, because it is as close to a constant and comparable quantity for year-over-year numbers.
last june july had what? metal gear and soul calibur, right
the recession certainly plays a part, but a few giant games can drastically alter yoy monthly sales.

[drakkarim]

what do you want to bet that gamestop is going to have another gain in THEIR profits. will publishers 'get it'? yeah right.

[Demo_Boy]

Instead of buying new, full price games, gamers are turning to GameStop (who has been putting up record numbers) and buying used. ....

And thent there's the fact that ... 2008 ...(had)... Super Smash Bros Brawl, Mario Kart Wii, Grand Theft Auto IV, Wii Fit, ... that is not happening in 2009.

Pricing on Wii is just dorky at this point, Nintendo has just been waiting to reach purchase saturation at their starting price point for years now, well... now they've reached that point. They can easily drop the price to increase the addressable market.

But what's interesting to me is that 360 sales are flat year over year, while the other platforms are down... wow for Xbox.

It's not clear if Ps3 is down YOY or if they are also flat.

[Froggy]

Wall Street are a bunch of idealistic, short-sighted morons (stating the obvious, I realize).

Impossible! Wall street is a street, I say. Or is it a wall?

[RMan]

I can't imagine where the idea that the games industry is recession-proof came from
History of events taken from large sample sizes. The game industry made more money last year, and the recession was taking place then too. Looking at data like this, with such a small sample size and thinking it means something is unwise, all you ever get is people on both sides of the argument jumping up and down whenever the numbers roll their way. The numbers this year may look worse than last year, but that's likely because Nintendo does not have the lineup it had last year.

I don't know if 'recession proof' is a good term, likely not (like calling something indestructible simply because it hasn't been destroyed), but it has proven itself, like many entertainment industries, to take far less of a hit, if any, than the rest of the economy.

[Emabulator]

Impossible! Wall street is a street, I say. Or is it a wall?It is a very nice street as a matter of fact (it does have walls too). You can make over 100k a year selling* Sabrett hot dogs from a cart there. :D

* My dream job. ;)

[greenapple]

History of events taken from large sample sizes. The game industry made more money last year, and the recession was taking place then too. Looking at data like this, with such a small sample size and thinking it means something is unwise, all you ever get is people on both sides of the argument jumping up and down whenever the numbers roll their way. The numbers this year may look worse than last year, but that's likely because Nintendo does not have the lineup it had last year.

I don't know if 'recession proof' is a good term, likely not (like calling something indestructible simply because it hasn't been destroyed), but it has proven itself, like many entertainment industries, to take far less of a hit, if any, than the rest of the economy.

The video gaming industry doesn't have enough of a history to make this kind of claim.

It's a growth industry because the technology and the industry as a whole hasn't matured. When one says "recession proof" they mean it is unaffected by recession, all else being equal. Potential recession impact mixes with built in growth in such a way that its nearly impossible to tell if the industry is recession proof or not.

While a bit of exaggeration, take for example the Blu-ray player market. I'll bet more of them were sold in 2008 than 2007, recession be damned. Does that mean that Blu-ray is "recession proof"? No, it just means growth is still outpacing recession impact.

[RMan]

It's a growth industry because the technology and the industry as a whole hasn't matured. When one says "recession proof" they mean it is unaffected by recession, all else being equal. Potential recession impact mixes with built in growth in such a way that its nearly impossible to tell if the industry is recession proof or not.
Yea, that's true, but the game industry is hardly new, and many would consider it 'mature'. If your definition is that it's growth is absolutely complete, this couldn't be ascertained until well into it's decline. In the end, if it's been around for many decades, and continues to grow during a recession, then for the practical purposes for which it's being discussed it's recession resistant, at worst. I doubt many, when discussing it, are assuming we're talking about the game industry 50 years from now.

But yea, even after the game industry is dead and gone and it's discussion is purely academic, using the term 'recession proof' could still be dismissed for having insufficient data.

[Grumsh]

what do you want to bet that gamestop is going to have another gain in THEIR profits. will publishers 'get it'? yeah right.

No, they wont "get it". Matter of fact they will "get it" even less by offering more incentives for people to shop at Gamestop. Sadly I am on their Gameemailspam list, since I subscribe to their magazine. I am seeing more and more Gamestop only exclusives to purchase a game from them.

[zaekrex]

Oh noes, consoles are dying just like teh PCz!11

[lockwoodx]

But the PS3 is making more money off revenue now, for the first time in a calendar month, than the Wii. This is unprecedented.

The Wii used to outsell the competition by 5:1, now barely managing to stay ahead by a few thousand units? Yeah-- definitely time to shake things up to keep the train moving, IMO.

For winning the race ahead of time, Nintendo now has more money and time to develop the next big thing. Poor sony... slow and steady didn't work out this time.

[Mephistopheles]

US Games Piracy Surge Continues, Up 26%

[NeoNecro]

sigh they gotta get better games out there. for a long while now i haven't seen much that would excite me, mybe Operation Flashpoint 2 but thats about it. redo ghost recon one and release it!