The NY Times has an interesting article up on the subject of game sales. I'd say its a bit mixed... sales have slowed but are still up when compared to last year. Read the entire NYTimes article and you decide...
Growth Slows for Video Game Market
By Matt Richtel
Sales of video game software grew far less rapidly in November than they did in October, according to a report published Thursday by the NPD Group, a market research firm.
The data suggests that the video game market, which industry executives and analysts have characterized as relatively recession-proof, is feeling the pinch of consumer caution.
For the month of November, software sales in the United States were $1.45 billion, up 11 percent from the same month a year earlier. But that growth rate is down sharply from October, when sales were up 35 percent over a year ago.
More broadly, sales in the video game market over all — which includes software, hardware and accessories — rose 10 percent in November as compared with a year ago. In October, the increase was 18 percent.
NPD characterized the sales growth as strong, given that Thanksgiving was later this year than last, meaning that the big holiday sales push started later as well.
The video game industry tends to have its own cycles, which are somewhat separate from macroeconomic patterns. That is because the industry’s ebbs and flows track closely with the introduction, adoption and obsolescence of new hardware platforms. This year was supposed to be a big one for the industry, because the latest generation of consoles — the Nintendo Wii, the PlayStation 3 and Microsoft’s Xbox 360 — are all available and supported by many software titles.
But the growth slowdown in such a critical month as November may well indicate that the rapid downturn in the economy is taking its toll on the industry.
That said, hardware sales grew 10 percent in November, as compared with 5 percent in October. And the big winner — and apparent driver of the industry’s growth — is the Nintendo Wii. It sold 2 million units in November. Microsoft sold 836,000 Xbox 360s, while Sony sold 378,000 units of PlayStation 3.
Nintendo also fared well in software sales — at least relative to competitors. Of the 10 best-selling games in November, four belonged to Nintendo, while three were from Activision Blizzard, according to NPD.
The NPD data comes out two days after Electronic Arts, the publisher of Madden football and other sports titles, surprised investors by saying it would not meet its sales and profit projections for its fiscal 2009.
It was the second time in six weeks that Electronic Arts had downgraded its projections.
The fact that Electronic Arts cut its forecast so rapidly left some question as to whether the video game market as a whole was facing unexpected pressure from the economic downturn. Indeed, one industry analyst said that in the days leading up to the latest cut, Electronic Arts was assuring Wall Street that it would hit the lower end of its financial guidance. The fact that it made such an about-face suggests that the market turned sharply.
The latest numbers appear to suggest that the market did turn sharply, but also that the problems facing Electronic Arts are in part a result of its own internal issues and not macroeconomic ones. Of the 10 best-selling games in November, Electronic Arts publishes only one, Left4Dead (the eighth-best-selling game, despite a substantial marketing campaign).
For many years, E.A. successfully defied the conventions of the video game industry, which is essentially a hits-driven business that rewards companies that come up with hot titles. E.A. managed to find great financial stability by creating sports franchises that generated tens of millions of dollars each year. The trouble is that E.A. has been unable to generate new hit games, and its operating margins sank over the last few years.
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