Video game industry sales down 17 percent--again

Daniel Terdiman | May 26, 2009

For the second straight month, video game industry sales tumbled nearly 17 percent year over year, a downward trend for a market segment that had previously seemed resistant to the economic pressures of the recession.

In April, according to industry analyst NPD Group, the industry posted revenue of US$1.03 billion, down 16.9 percent from the US$1.24 billion it recorded in April 2008. Sales for the month were also down 30 percent from US$1.43 billion in March.

NPD analyst Anita Frazier cautioned in a report that it's hard to reach the conclusion that the industry has begun to soften, noting that "it's important to remember that April (2009) is being compared against a month--April 2008--that realized nearly 50 percent growth over April 2007."

Frazier also noted that the industry's performance last month was its second-best April on record, and that unit sales across the board were down just 5 percent, with the rest of the revenue decline coming as a result of reduced "average selling prices."

Still, there's little doubt that the trend line is heading down, both broadly and rapidly. March's numbers were already down 2.7 percent from February's US$1.47 billion, and in April, each of the three major video game consoles--Microsoft's Xbox 360, Nintendo's Wii, and Sony's PlayStation 3--saw sizable sales drops. Xbox sales were off 47 percent, while the Wii and PS3 were down 43.4 percent and 41.7 percent, respectively.

The only bright spot, on the hardware side of things at least, was the newest generation of Nintendo's DS handheld gaming device, the DSi, which launched during the month. In April, Nintendo sold 1.04 million handhelds, up 84.7 percent for the month.

Perhaps most interesting in those numbers is the steep decline in sales of the Wii, which has been dominating console sales for some time. The Wii did still lead the pack in April, but there have been rumblings about its strength softening in recent months, despite the console now being easy to buy. Earlier in the year, and especially during the holiday season, it was nearly impossible to find a Wii for sale at retail. These days, they are readily available at many stores.

But Frazier, again trying to soften the blow of the April numbers, noted that the Wii's 52.4 percent year-over-year sales drop (Nintendo moved 714,000 Wiis in April 2008) was partly attributable to the fact that a year ago the console's fortunes had been driven by the launch of two "huge new titles: Super Smash Bros. Brawl and Mario Kart."

Via CNET.com

Filed under: Games and Gear
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