IndustryGamers now has its hands on the latest NPD video game sales data for the month of June, and as analysts predicted, we've just gone through the fourth consecutive month of decline. It's time to officially remove the absurd “recession proof” label from video games. Total industry sales dropped 31% year-over-year to $1.17 billion, while hardware fell 38% to $382.62 million and software fell 29% to $625.79 million.
Accessories saw the smallest decline, but still dropped 22% to $158.20 million. Accessories were driven in part by the new Wii MotionPlus, which sold 169K units in its first month at retail (not counting those bundled with Tiger Woods PGA Tour 10), and video game points and subscription cards for things like Xbox Live or PSN (this category was actually up 67% as people buy more digitally).
The net result, however, is that the entire video game industry is now trending down across all categories and total revenues through June are tracking behind 2008 by 12%. NPD analyst Anita Frazier commented, “The first half of the year has been tough largely due to comparisons against a stellar first half performance last year, but still, this level of decline is certainly going to cause some pain and reflection in the industry. Because the question invariably arises, this month saw the greatest year-over-year monthly decline since September 2000 when the industry declined 41%.”
At this point, we really have to wonder if 2009 will be able to top 2008's record-breaking performance. Frazier seemed cautiously optimistic: "Even with the industry down 12% year-to-date, with a strong back-half performance, full year sales could still be flat to slightly up to 2008's record-breaking performance. Of course, that could be put further at risk if more highly anticipated titles move out of 2009 into 2010 or later."
She continued, "Our latest gamer segmentation study suggests that more than 4 million new 'players' have entered the games market since last year, so certainly the decline isn't due to less folks participating in the industry . Some of these are new retail consumers and some are playing online for free, and others are a mix of both. The trick is to continue to figure out how to monetize all the gaming that is going on across PC, mobile devices, and video game systems. Certainly there is plenty of opportunity in the industry, but the rate of change in many areas of the industry presents a lot of challenge as well .
"This is one of the first months where I think the impact of the economy is clearly reflected in the sales numbers. While the aggregate of content may not be as strong as what we saw in the first half of last year, and while the consumer base willing to spend dollars on hardware at the current price points may be thinning, the size of the decliine could also point to consumers deferring limited discretionary spending until a big event (must-have new title, hardware price cut) compels them to spend."
In terms of hardware, Nintendo still remains dominant, but Wii figures are nowhere near as impressive anymore. The DS sold another 766.5K units while the Wii sold 361.7K. Xbox 360 followed with 240.6K while Sony's platforms trailed behind. PS3 sold 164.7K, PSP sold 163.5K and PS2 sold 152.7K.
Frazier noted that Xbox 360 was “the only platform to have realized a unit sales increase over last June,” and year-to-date, “both the 360 and NDS have generated an increase in unit sales.” Additionally, although Wii demand has trailed off a good deal in recent months, Frazier believes the sales pace for the console is still quite decent. "While Wii sales are down from last year, the platform is still realizing very strong sales month after month. Compared against historical performance of other systems this far into the console lifecycle, the unit sales performance is still strong," she said.
On the software side, Activision's Prototype took the top spot, but the 600K total (360/PS3 combined) is not typically indicative of a top-selling game, Frazier pointed out: “While this is solid performance for new IP, it's a relatively modest sales figure for any game capturing the top spot for the month." Sony's inFamous did just make the top 10, despite being limited to one platform with a smaller installed base.
Interestingly, for the first time in a very long time, Nintendo's Wii Play did not find a spot in the top 10. “This is the first month since its launch at retail 29 months ago that Wii Play has not been featured in the top 10 list for the month. That's an astonishing record for this industry," said Frazier. We tend to think this is a reflection of the lowered demand for Wii hardware overall, as many new Wii purchasers would pick up Wii Play to get the additional remote controller.
Although you might be tempted to point to digital distribution as a reason for retail software sales declining in recent months, Frazier doesn't believe this to be a major factor. "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. 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," she commented.
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