August video game sales fall
Continued consumer reluctance to spend and a light release schedule sent video game retail sales tumbling in August for the fourth consecutive month and the ninth time in the last 12 months, according to the market research firm NPD Group Inc.
Console game sales plummeted 34% last month to $264.8 million compared with $403.5 million in August 2010, an NPD report released late Thursday afternoon said. Sales of console hardware slipped 12% to $249.4 billion, compared with $282.9 billion last year.
One major factor in the decline was the delayed release of Madden NFL 12 from Electronic Arts Inc. The title, which generally pulls in hundreds of millions of dollars in sales, debuted on Aug. 30, meaning its sales won’t be counted until September. Last year, Madden came out on Aug. 10.
“If we equalize for Madden, sales would be down less than 10%,” said Michael Pachter, an analyst with Wedbush Securities. “So things are not as bad as they seem.”
Overall game sales, including games, consoles and peripherals such as extra controllers, were $669.9 billion in August, down 23% from $873.8 billion a year earlier.
The figures don’t include sales made over Xbox Live, PlayStation Network, Steam or other online channels that are beginning to make up an increasingly large portion of the industry’s revenue. They also don’t include revenue from online social games, mobile games and subscription services such as World of Warcraft.
“The NPD numbers represent about two-thirds of the industry’s revenue” in North America, said Pachter, who estimated that physical retail sales are likely to remain flat for the next few years while online and mobile games will grow from just over $9 billion this year, or 33% of the game market in the U.S. and Europe, to $16 billion, or more than 44% of the industry’s revenue, in 2013.
“A year ago, the tablets weren’t even a factor,” Pachter said. “Four years ago, who knew the iPhone would change the way we think about games? Things are changing rapidly.”
