The US video game industry, which appeared to be riding out the recession last year, had the horse shot from under it in the first half of 2009.
The June sales figures released by the NPD research firm on Thursday night showed the fourth consecutive month of year-over-year declines. June’s 31 per cent drop was the greatest year-over-year monthly fall since September 2000, when the industry declined 41 per cent.
“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,” said Anita Frazier, NPD analyst.
There have been no game releases to match last year’s launches of Grand Theft Auto IV and Wii Fit in the first half of 2008, but there is a strong release schedule planned for the second half, which should mark an upturn in fortunes.
Analysts at Wedbush Morgan Securities said in a Friday note that June sales were lower than their weak expectations, but the trend probably only had another month to run.
“We are most troubled by the decline in sales of the three major consoles. On a year-over-year basis in June, combined console sales were down 30 per cent, with [home] consoles down 41 per cent and handhelds down 17 per cent, ” they said.
“We don’t think that a weak software lineup is enough to explain what happened, and can only conclude that consumers aren’t sufficiently interested in buying consoles to drive sales higher each month. We attribute this lack of interest to price fatigue, and note that the Wii has gone longer than any console in history without a cut of its launch price, while the PS3 has gone more than 18 months without a cut.”
That may explain why Microsoft’s Xbox 360, which has driven its price down to be the cheapest console at $199, is the only one of the three to show growth so far this year.
Sales were up 20 per cent in the first half and 9 per cent year-on-year in June, with 241,000 units sold.
Nintendo released its Wii Sports Resort this month with the Wii Motion Plus improved controller included inside. It may have come in the nick of time, with its Wii Play package of sports games not featuring in the top ten list in June for the first month since its launch at retail 29 months ago.
If Sports Resort does not do well, Nintendo may have to look at a price cut in the autumn, while Sony will certainly be contemplating a reduction, in time for the holiday season.
