Yesterday we learned that Activision Blizzard (ATVI) is doing well. It’s too bad we can’t say that for the rest of the industry! Last night, market-research firm NPD reported video-game industry sales for March 2009, and there wasn’t much to get excited about.
Overall sales fell 17% to $1.43 billion, with hardware down 18%, software down 17%, and accessories down 15%. The problem wasn’t the economy. It’s just that the industry was facing an incredibly tough year-over-year comparison.
In March of 2008, hardware sales were up 51%, while software sales were up an insane 63% on the back of Nintendo’s Super Smash Bros: Brawl, Ubisoft’s Rainbow Six: Vegas 2, and Electronic Arts’ (ERTS) Army of Two.
Capcom’s Resident Evil 5 sold an excellent 1.5 million units, but even that paled in comparison to Brawl’s insane 2.7 million unit sales last year. Even at a 17% lower price, that’s a significant difference in dollars. There may also have been some residual impact from higher used-game sales and discounting at the failing Circuit City.
So if you look at two-year industry growth, the numbers look pretty good, even with the decline. March 2009 hardware sales are up 24% relative to March 2007, with software sales up 35%.
Microsoft is out bragging about the Xbox 360’s sales performance, noting the following:
Xbox 360 was the only game console to show year-over-year growth in the U.S. as the $199 starting price continued to resonate with consumers looking to get more entertainment value for their money. Retail sales of Xbox 360 systems hit 330,000 units in March, climbing 25 percent from a year earlier, in contrast to double-digit declines posted by Wii and PlayStation 3. March was the sixth month in a row that Xbox 360 has seen year-over-year sales growth.
Of course, Microsoft failed to note that the Wii and DS outsold the 360 by 82% and 71%, respectively. I forgive them for leaving out those details after Sony’s most recent goofiness.
The real takeaway? It was actually said yesterday BEFORE the NPD data release by Xbox 360 Product Management Director Aaron Greenberg. In an interview with EpicBattleAxe.com, he said the following:
As far as the PS3 price drop rumors, to be honest we fully expect a PS3 price drop to happen by E3 at the latest. If you look at the market fundamentals they have no choice but to do so with continuing year over year sales declines over the last 5 months, significant loss of market share and public response from consumers, retailers and publishers. It is also a very difficult time economically to try and sell a product at twice the price of your competition.
He’s biased, but he’s right. As I said back in December 2006, Sony’s just charging way too much for a console with too few exclusives. The Blu-ray bet has backfired – it’s just not something most gamers need, and if they want to make up ground, they need to cut price fast.
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