Video game sales plunge 42% in April

Video game sales took a nose dive in April, plunging a stomach-churning 42% compared with a year earlier as companies cranked out fewer releases than in April 2011.

Retailers rang up just $292.1 million in game sales last month, down from $503.2 million a year earlier, according to the NPD Group, a market research firm.

With fewer new games to drive people into stores, sales of game consoles also took a hit, down 32% to $189.7 million.

"Simply stated, there were notably fewer" new game releases, said NPD analyst Anita Frazier. "I think it’s a simple as that, because when we see compelling content come into the market, the games are still selling as well as ever. We just saw a lot less of this in April as compared to last year.”

Sales of accessories such as extra controllers held steady at $148.6 million in April, while sales of used games, digital game downloads and online game subscriptions contributed an additional $370 million, kicking the industry's monthly total to $1 billion. NPD, which recently began tracking digital game sales, does not have a comparable figure for 2011.

Analysts speculate that the soft sales figures will lead companies to cut the price of games and consoles in order to encourage buyers.

"April industry sales remain soft, and declining ... volumes will likely necessitate price cuts," Colin Sebastian, an analyst with Robert W. Baird & Co., wrote in a note to investors.

Sebastian said there are bright spots on the horizon as game publishers prepare to unleash some of this year's most anticipated games -- among them Max Payne 3, from Take-Two Interactive Software Inc., and Diablo III, from Activision Blizzard Inc.

"We still expect overall product momentum to improve beginning in May with launches of Diablo III and Max Payne," he said.

For a list of the top 10 games sold in April, click the link below to continue reading.

Video game sales continue slide in March

March was another brutal month for sales of video game discs and consoles as total revenue dropped 25% in the U.S. from the same month last year, according to research firm NPD Group.

It was the fourth straight month that video game industry sales have dropped and comes after revenue fell 8% in 2011. However, the data include only sales of physical games and consoles and excludes the fast-growing but still smaller market for digital downloads, social and mobile video games.

It was the devices themselves that suffered the most, with revenue down 35% to $323.5 million. NPD analyst Anita Frazier said in an email that while sales of all video game devices were down, "high definition consoles" — meaning Microsoft's Xbox 360 and Sony's Playstation 3 — fared best. That meant Nintendo's Wii and handheld 3DS and Sony's new handheld Playstation Vita, which debuted in February, appear to have sold poorly.

Sales of software — the games themselves — dropped 25% to $553.1 million. Electronic Arts' highly anticipated science-fiction sequel Mass Effect 3 was the month's best-selling game, while Capcom's newest installment in its Resident Evil horror series, Operation Raccoon City, came in at No. 2.

Activision Blizzard's kids' game series Skylanders: Spyro's Adventure continued to be popular, NPD said. The game itself, released in October, was still the No. 15 title in March. More significantly, three Skylander "character packs" — toys that can be integrated into the game — were among the top-10-selling video game accessories for the month. "The [Skylanders] accessory items are selling phenomenally well," said Frazier.

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Photo: An image from Mass Effect 3. Credit: Associated Press.

Video game sales plunged 20% in February

Video game sales in February suffered another double-digit monthly decline, plunging 20% to $1.06 billion, down from $1.33 billion in February 2011, according to a report released Thursday from the NPD Group Inc. 

Sales of consoles and games dropped 34% in January compared with a year earlier.

Game software struggled the most, dropping 24.4% to $464.4 million last month versus $601.4 million a year ago.

A strong release of the PlayStation Vita, Sony's Corp.'s latest portable game console, introduced in the U.S. on Feb. 22, helped to cushion the overall decline in hardware sales last month, but not enough to prevent an 18% decline in sales of consoles, including the Nintendo Wii.

The top 10 titles, listed below, continued to make up the bulk of the industry's revenue, accounting for 78% of total game sales in terms of units, NPD said. Still, that's less concentrated than it was a year ago, when the top 10 titles made up 94% of sales.

One notable new entry into the rarefied list of bestsellers is Kingdoms of Amalur: Reckoning, the debut fantasy action title of 38 Studios, an independent game company founded by former major league baseball pitcher Curt Schilling, whom we recently profiled.

Top 10 U.S. Video Games for February 2012

1. Call of Duty: Modern Warfare 3 (Activision Blizzard) 

2. Final Fantasy XIII-2 (Square Enix) 

3. UFC Undisputed 3 (THQ) 

4. Kingdoms of Amalur: Reckoning (38 Studios / Electronic Arts) 

5. Just Dance 3 (Ubisoft) 

6. NBA 2K12 (Take-Two Interactive Software) 

7. Soul Calibur V (Namco Bandai) 

8. Elder Scrolls V: Skyrim (Bethesda Softworks)

9. Twisted Metal 2012 (Sony) 

10. Battlefield 3 (Electronic Arts) 

Source: NPD Group Inc. 

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Screenshot of Final Fantasy XIII courtesy of Square Enix.

January video game sales tank on lower releases

Sales of U.S. video games and consoles plunged 34% in January to $750.6 million, compared with $1.14 billion a year earlier, according to market research firm NPD Group Inc.

Revenue from consoles such as the Xbox 360, the PlayStation 3 and the Wii fell 38% to just under $200 million last month, down from $324 million in January 2010, NPD said in a report released Thursday. Console accessories, such as game controllers, slipped 18% to $195 million from $237 million.

Sales of games played on both personal computers and consoles ebbed 37% to $380 million, down from $603 million last year.

A dearth of new game releases last month made for the poor comparison with January 2011, when a flurry of new, high-profile games such as Dead Space 2 and DC Universe Online pumped up sales. All of the titles in the top 10 list for January 2012, for example, debuted last year.

Hard-core shooter titles remained popular, with Call of Duty: Modern Warfare 3, Battlefield 3 and Saints Row: The Third taking top slots. Dancing and fitness games also continued to sizzle, with Just Dance 3 and Zumba Fitness 2 selling well.

Top-selling video games in January 2012

(publisher)
1. Call of Duty: Modern Warfare 3 (Activision Blizzard)
2. Just Dance 3 (Ubisoft)
3. Elder Scrolls V: Skyrim (Bethesda Softworks)
4. NBA 2K12 (Take-Two Interactive Software)
5. Battlefield 3 (Electronic Arts)
6. Madden NFL 12 (Electronic Arts)
7. Mario Kart 7 (Nintendo)
8. Skylanders: Spyro’s Adventure (Activision Blizzard)
9. Zumba Fitness 2: Party Yourself Into Shape (Majesco)
10. Saints Row: The Third (THQ)
Source: NPD Group

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No high score for video game sales in 2011

Besieged by increased competition for entertainment dollars and a sour economy, the video game industry saw sales drop 8% last year despite a deluge of highly anticipated titles that launched during the crucial holiday season.

Shoppers spent just over $17 billion on video games and consoles in 2011, down from $18.6 billion in 2010, according to a report released Thursday by NPD Group Inc., a market research firm.

Roughly $8.8 billion of the total spending last year -- about 52% -- went to buying games, down from $9.4 billion in 2010. The balance, $8.2 billion, was for console hardware and peripheral devices, such as extra game controllers. That figure fell from $9.2 billion in 2010.

December, typically the industry’s best shot at ringing up big sales, clocked even steeper declines. Combined sales of consoles and games fell 21% to $4 billion last month, compared with $5.1 billion a year earlier.

“Lots of people rushed into stores on Black Friday to buy games, but they disappeared in the first three weeks of December,” said Michael Pachter, an analyst with Wedbush Securities. “The stores were empty. They only came back during the week just before Christmas. Consoles in particular are way down. It’s weird, but people don’t seem to see them as gifts anymore.”

Sales of consoles such as the Wii, 3DS, PlayStation 3 and Xbox 360 tumbled 28% on a dollar basis in December, according to NPD. Sales also were down on a unit basis despite major price cuts on several consoles, Pachter said.

Consumers bought just 6.3 million consoles last month, down from 8.4 million a year earlier, Pachter noted. “That’s the lowest level since 2005,” he said.

Some of those dollars have migrated to online, social and mobile games, as well as games that are digitally downloaded, which were not included in the NPD report.

When spending for those games is included, industry revenue looks much more stable, down just 2% last year compared with 2010, said Anita Frazier, NPD’s game analyst.

"December was very rough," Frazier said. "Because of the great slate of content that came to market during the fourth quarter, I had expected December sales to represent a larger portion of total-year sales than what occurred.  This year, December accounted for just 23% of annual sales, while the average for the past 10 years has been 28%."

The year was not uniformly bad for all publishers. Ubisoft Entertainment landed three of the top 10 games sold in 2011, including two versions of its Just Dance franchise. Electronic Arts Inc.’s Battlefield 3 and Madden NFL12 took two slots in the top 10 list. And Activision Blizzard Inc.’s Call of Duty military shooter franchise took the No. 1 and No. 6 spots.

“It was a tough year for the industry,” said Tony Key, Ubisoft’s senior vice president of marketing and sales. “But if you innovate and you bring something fun, you can still win.”

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Image: Characters in the Assassin's Creed: Revelations game. Credit: Ubisoft Entertainment

Call of Duty: Modern Warfare 3 clocks $1 billion in sales

That didn't take long. Call of Duty: Modern Warfare 3 rang up $1 billion in sales just 16 days after it launched in stores Nov. 8, according to the game's Santa Monica publisher, Activision Blizzard Inc.

Activision said about 30 million people have played a Call of Duty game since the series launched in 2003.

Still, Activision, in a statement released Monday morning, placed Call of Duty in the same pantheon of other mega-entertainment franchises such as "Star Wars," "Harry Potter" and the National Football League.

Whether Call of Duty proves as enduring as the NFL, which kicked off in 1920, remains to be seen. But for this year, Modern Warfare 3 is likely to stand untoppled as the bestselling game of 2011.

Even with three weeks remaining in the year, Amazon.com already declared it to be the No. 1 game for its store. The online retailer on Monday released its top 10 selling titles for 2011. Activision claimed two spots on the list -- both of them Call of Duty titles. 

Activision said the amount spent on the latest Call of Duty franchise bested the box office take of James Cameron's "Avatar," which took 17 days to reap $1 billion after its release in 2009. Of course, more people--hundreds of millions--have seen "Avatar" in theaters than have played Call of Duty.

 

Top 10 titles sold on Amazon.com in 2011*

1. Call of Duty: Modern Warfare 3 (Activision Blizzard)
2. Just Dance 3 (Ubisoft Entertainment)
3. Elder Scrolls V: Skyrim (Bethesda Softworks)
4. Battlefield 3 (Electronic Arts)
5. Portal 2 (Electronic Arts)
6. Batman: Arkham City (Warner Bros. Interactive)
7. Just Dance 2 (Ubisoft)
8. Madden NFL 12 (Electronic Arts)
9. Gears of War 3 (Microsoft)
10. Call of Duty: Black Ops (Activision)

*Sales are for games sold as discs. They do not include games sold as digital downloads.

Source: Amazon.com

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Photo: Cody Graybeal, left, and his brother Kyle Graybeal, both of Nevada, bought their copies of Call of Duty: Modern Warfare 3 the day it launched at a GameStop store in North Las Vegas, Nev. Credit: Ethan Miller / Getty Images.

Video games post record November sales

Video game software sales rebounded in November, a critical month for the industry as gift buying takes off in the weeks leading up to the holidays.

Sales of games sold as discs jumped 15% to $1.67 billion last month compared with a year earlier, the most that’s been rung up for a November sales period, according to a report from market research firm NPD Group Inc.

“Content sales grew substantially thanks to a great slate of new titles,” said Anita Frazier, NPD’s game analyst.

Hard core games dominated the bestseller list as a bumper crop of hotly anticipated shooter, role-playing and adventure titles hit the market last month, including Call of Duty: Modern Warfare 3 from Activision Blizzard Inc. and Elder Scrolls V: Skyrim and Saints Row: The Third from THQ Inc.

Analysts were heartened by the uptick in game sales, which had limped along since 2009, when the economic downturn caused consumers to ratchet down spending.

“This is the first time software sales have been up three months in a row since 2008,” said Michael Pachter, analyst with Wedbush Securities. “This kills two misperceptions about the industry. The first is that console games are dead. The second is that mobile and social games killed console games.”

Conversely, dollar sales of consoles and other gaming hardware declined, mostly because of price cuts that have occurred in the past year.

Nintendo Co., for example, sliced the price of its 3DS handhold in August to $170 from $250. As a result, overall console sales dropped 9% in November to $982.4 million compared with a year earlier.

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Screen shot of Saints Row: The Third, which debuted at No. 8 on the list of top selling video games in November. Credit: THQ Inc.

Game sales perk up in September, but console sales remain down

Video game sales, which have languished for much of the year, revived 4% in September after four consecutive months of declines, according to a report from market research firm NPD Group.

The industry scored $630.2 million in sales of games sold at retail stores last month, up from $612.1 million a year earlier. But revenue from game consoles fumbled 9% to $349 million, down from $382.9 million in September 2010, as manufacturers cut the cost of devices used to play those games, such as the Nintendo hand-held 3DS console, whose price tag went from $250 when it launched in March to $170 just five months later.

The decline in hardware offset the gains in game sales, leading to a 6% overall decline in total sales to $1.16 billion from $1.23 billion in September 2010.

Nevertheless, the modest, but notable, improvement in software sales is expected to continue through the remainder of the year as the industry heads into the crucial holiday season, when as much as half of game retail sales are rung up, analysts agree.

"Every month will be up from here," said Michael Pachter, an analyst with Wedbush Securities. 

Fueling analysts' optimism is an unusually robust lineup of blockbuster titles scheduled for release in the coming weeks, including Battlefield 3, Batman Arkham City, Uncharted 3: Drake's Deception, Star Wars and Call of Duty: Modern Warfare 3.

Even though game sales are expected to finish strong, many believe that the industry will still end up down from last year because of devastating declines earlier this year, particularly during the summer months. July sales, for instance, plunged 26%, followed by a 21% drop in August.

Pachter estimates the industry's year will be down 4% compared with 2010.

Notably, sales of online, social and mobile games are not included in NPD's monthly sales report. All three categories have grown substantially as consumers spend more time playing games on Facebook and on devices such as the iPad and Android smartphones.

As for traditional games sold on old-fashioned discs, click on the "continue reading" link below. 

Game sales slide 23% in August

 

Continued consumer reluctance to spend and a light release schedule sent video game retail sales tumbling in August for the fourth consecutive month and the ninth time in the last 12 months, according to the market research firm NPD Group Inc.

Console game sales plummeted 34% last month to $264.8 million, compared with $403.5 million in August 2010, an NPD report released Thursday afternoon said. Sales of console hardware slipped 12% to $249.4 billion, compared with $282.9 billion last year.

One major factor in the decline was the delayed release of Madden NFL 12 from Electronic Arts Inc. The title, which generally pulls in hundreds of millions of dollars in sales, debuted Aug. 30, meaning its sales won't be counted until September. Last year, Madden came out Aug. 10.

“If we equalize for Madden, sales would be down less than 10%,” said Michael Pachter, an analyst with Wedbush Securities. “So things are not as bad as they seem.”

Overall game sales, including games, consoles and peripherals such as extra controllers, were $669.9 billion in August, down 23% from $873.8 billion a year earlier.

The figures don't include sales made over Xbox Live, PlayStation Network, Steam or other online channels that are beginning to make up an increasingly large portion of the industry's revenue. They also don't include revenue from online social games, mobile games and subscription services such as World of Warcraft.

“The NPD numbers represent about two-thirds of the industry's revenue” in North America, said Pachter, who estimated that physical retail sales are likely to remain flat for the next few years while online and mobile games will grow from just over $9 billion this year, or 33% of the game market in the U.S. and Europe, to $16 billion, or more than 44% of the industry's revenue, in 2013.

“A year ago, the tablets weren't even a factor,” Pachter said. “Four years ago, who knew the iPhone would change the way we think about games? Things are changing rapidly.”

Video game sales fall in June

Video game sales plunged again in June, dropping 10% from the same period a year ago, as consumers greeted some new releases with a yawn and as sales continued to erode for Nintendo Co.’s once-popular Wii console.

Sales of games and the consoles required to play them totaled $1.03 billion last month, compared with $1.15 billion in June 2010, according to the NPD Group, a market research firm. The decline followed a 14% slide in the previous month to a four-year low for the video game industry.

The lower numbers do not necessarily spell doom for the entire sector. An increasing portion of the industry’s sales now come from digital channels such as Apple Inc.’s iTunes, Facebook Inc. or Microsoft Corp.’s Xbox Live online marketplace. Such sales are not captured by the monthly NPD sales reports.
John Riccitiello, chief executive of game publisher Electronic Arts Inc., estimated that digital distribution, which currently accounts for 25% of the industry’s sales, could reach 50% of overall game revenue within five years.

Still, traditional games sold at retail outlets as discs continue to be a vital component of the $40-billion global game industry. And monthly fluctuations such as the drops seen in May and June aren’t an indication of how the year will play out. That’s particularly true for video games, where the bulk of the industry’s sales occur in the months leading up to Christmas.

June’s result partly reflected weak sales of titles that launched last month, including Activision Blizzard Inc.’s Transformers: Dark of the Moon, THQ Inc.’s Red Faction: Armageddon, and Ubisoft Entertainment’s Child of Eden –- none of which made the list of top 10 selling titles for the month.

Sales of Nintendo’s Wii console also continued to slide, according to Michael Pachter, an analyst with Wedbush Morgan Securities. And its new handheld 3DS console is facing tough competition from Apple Inc.’s iPhones and iPads.

“The DS is losing share because of smartphones,” Pachter said. “Seventy percent of DS users are pre-teens. Within that population, 50% are perfectly happy with an iPhone or iPod Touch. So Nintendo has lost access to about half of that market.”

-- Alex Pham

Video game image from Red Faction: Armageddon. Credit: THQ

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