Games Industry Reflects Wider Tech Sales Slump

Lower console prices and hotly anticipated titles couldn’t save the video game industry from experiencing another drop in sales as the apex of the holiday shopping season grows near: Sales slid 7.6 percent in November, to $2.7 billion (£1.7bn), for a year-to-date total of $14.1 billion, down 12 percent from the same period last year.

Hardware sales for the month totaled $1.05 billion, down 13.4 percent from November 2008, while video game software sales suffered a less precipitous drop, falling 3.1 percent to $1.4 billion. Sales of video game accessories fell 5.5 percent, to $242.2 million.

Nintendo claimed the top two spots for console sales, selling 1.7 million units of the company’s portable DS player and 1.26 million of the motion-sensitive Wii console, which recently saw a price cut. Rival consoles Microsoft Xbox 360 and Sony PlayStation 3 followed, with sales of 819,500 and 710,400 units, respectively. The Sony PlayStation Portable, or PSP, was fourth, with nearly 294,000 units sold, while the decade-old PlayStation 2 rounded out the top five with 203,100 units sold.

NPD analyst Anita Frazier said while all hardware systems realised an increase over October, one would expect that from seasonality alone. She singled out praise for the PlayStation 2, which after 109 months on the market is still experiencing healthy sales. Sony’s pricey PS3 console also saw its greatest increase over last year’s November sales and had its third best month in unit sales ever, trailing only Decembers 2007 and 2008.

“While there has been a lot of focus on Wii sales as compared to last year, the system was still the best-selling console system by a margin of 54 percent. At this same point in the PS2 lifecycle, the PS2 was down in unit sales by 23 percent over the previous year, but as history has shown, it continues to have a great deal of life left in it,” Frazier said. “So focusing on a comparison to Wii’s stellar 2008 performance masks the reality of just how well this system is selling.”

Frazier said that, while the industry declined more than 7 percent versus last November, it is important to note what an extraordinary year 2008 was for the video game industry. “The industry still produced enough revenue to make this month the second-best November in industry history,” she said. “[Year-to-date] the industry is still up 7 percent over 2007. I think we all have to realise the incredible year that was 2008.”

On the software side, Activision’s “Call of Duty: Modern Warfare 2” held the top two spots—on the Xbox 360 and PS3 platforms, respectively. On the Xbox, the title sold 4.2 million units, while on the PS3 1.87 million copies were sold. Nintendo’s new side-scrolling “Super Mario Bros.” title moved 1.39 million units, good for a third-place finish. Overall, Nintendo claimed four positions in software sales for November. “While this year’s top-selling item bested last year’s by 283 percent, it couldn’t make up for softness elsewhere,” Frazier said. “The top 50 games this year sold 5 percent less units than did the top 50 last year.”