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NPD: Industry Sales See Biggest Decline In Nine Years
By Tom Ivan
July 17, 2009
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“This level of decline is certainly going to cause some pain and reflection in the industry”
US games industry sales suffered a fourth consecutive month of year-over-year declines in June.
Combined hardware, software and accessories revenues totalled $1.17 billion, down 31 per cent compared to last June, representing the greatest year-over-year monthly decline since September 2000. Sales in the three categories dropped 38 per cent, 29 per cent and 22 per cent respectively, according to figures supplied by the NPD Group.
Earlier this week analysts had forecast a 20-23 per cent drop in software revenues.
"The video games industry realised a significant decline when compared to June 2008,” noted NPD analyst Anita Fraizer. “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.
"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 decline could also point to consumers deferring limited discretionary spending until a big event (must-have new title, hardware price cut) compels them to spend."
The negative sales results mean year-to-date industry revenues are down 12 per cent compared to the same point in 2008, but Frazier suggested it is still possible that a strong back-half performance could see annual sales match or even surpass last year’s record total.
“Of course, that could be put further at risk if more highly anticipated titles move out of 2009 into 2010 or later," she added.
In recent weeks Take-Two has shifted the release of a number of high profile titles – including BioShock 2 – from 2009 to 2010, while Activision similarly delayed the launch of Singularity.
NPD: Xbox 360 Sales Rise As Other Systems Fall
NPD: Prototype Tops June Game Sales
NPD: Wii MotionPlus Sells 169,000 Standalone Units
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I can relate to withholding my limited discretionary income until a must-have title comes around. Sure I still buy the odd game, but my library is full of great games, and what I have been buying is great old stuff off auction sites cheap as chips. I want to buy new games sometimes, but simply can't afford to regularly consume a new game or two a month at $100+ a pop, especially when I can pick up brilliant old, and reasonably recent titles for a steal, ie just the other day I picked up DQVIII for $10 NZ, which relates to about 4 GBP or 5-6 US dollars. Dark Chronicle (Dark cloud 2 for most) for $20. That was just in the past week, and I'm yet to play Persona 3-4 I'm just sinking my teeth into the fan translation of P2:Innocent Sin. Maybe there's another factor here: games are long, old games are just as long and super cheap, old games are on auction sites and are super super cheap (Unless your Tombi/Tomba or a PS1 final fantasy, please Tombi come to PSN!!!!). Why fork out for new games getting mediocre reviews when something much more to my taste with lesser graphics is available for my lunch money, also it takes so long to finish games I'm not often left wondering what to play as theres always some title staring me down from my bookshelf that I haven't had time for.
However which way people want to deny it to themselves, the world is headed for another Depression of Great Depression, 1929-like proportions. All the tell-tale signs are there, yet too many are too afraid to admit it to themselves.
This could also explain why Sony is resurrecting PS2 and PSP from the dead - after all, in harsh economic times, the spending power for largely frivolous stuff goes down, hard and fast. People might stop being so overly focused on graphics 'eye-candy' or opt for a cheap PS2 or PSP to see them through a Depression. In a modern Great Depression-esque scenario, the price difference between a PS2/PSP and a 360 might make all the difference to the average parent/consumer.
If you think it'll happen, it will.
Companies can act like it's surprising, or that we're only halfway through this console cycle, but did they even look at the past nine years?
Around this time, in every generation save this one, all manufacturers are "slashing" console prices; while developers are just starting to show off the maturity & power of the platforms.
So the fourth year always "kicks-a$$" as you can get the best games & the best prices. Gaming is immune to the recession, as all media-based entertainment is, but it's not immune to stagnation. Maybe the prices shouldn't come down, but when you go in a store & see the same Wii, the same PS3, and the same Xbox, it's not interesting. It's not even about a drop. It's about a change - Although I don't think Activision's new £54.99 pricing scheme counts. On the other end, this year's seen very little maturity in the realm of pushing current consoles to their limits, as other generations have done.
This 10 year console cycle is a test - Sony's PS2 sales in Bangladesh don't count. This is the first generation with a 10-year cycle of showcase, forerunner consoles. Perhaps the experiment isn't working.....God, the least they could do is officially announce "reboot" casings for all three systems. That would be something.
The sales decline doesn't surprise me at all. This is the first generation in my 22 years of gaming where i haven't bothered my arse to buy a console.
The 360/PS3/Wii have been disappointing, to say the least.
This year's aggregate content isn't as strong as last year's? Last year had Metal Gear Solid 4, and GTA4 (high seller but I wouldn't call it 'strong content'). This time around we've had Riddick, Red Faction, Infamous, Prototype, and even Killzone 2 (alright, which wasn't half as good as it was supposed to be). The quality of this first half's year definitely trumps last year's.
Holy crap.
Well I don't know about you, but I'd say the video game industry is pretty insulated from the downturn.