News

US games business down 26% at retail, worst period in 5 years
Posted: 12.08.2011 11:30 by Simon Priest Comments: 10
NPD have painted a poor picture of the games industry in the US as overall retail sales were down 26 percent to just $707.7m, as software fell 17 percent.

Hardware fell harder at 29 percent while accessories declined 8 percent. The physical retail channel "suffered its lowest month" for 5 years in the US.


"There is no getting around the fact that video game sales in the new physical retail channel suffered its lowest month since October 2006," said NPD's Anita Frazier.

"Despite the very rough month, new physical retail sales are down just 4% year-to-date and based on seasonality trends observed over the last 10 years, which have been remarkably stable year-in, year-out, industry sales in this particular channel are poised to land in the flat to -2% range once the total year is completed.” July is a brutal month.

Fortunatley the digital marketplace is filling the ever growing void.

“New physical retail sales of hardware, software and accessories accounted for 69% of the total consumer spend on the industry in Q1. We have measured some remarkable growth in other ways that consumers are acquiring content, including digital sales of full games and add-on content, mobile games, and social network gaming," continued Frazier.

"Growth in these areas, combined with a flat to modest decline in new physical sales should result in 2011 showing growth over 2010." EA Sports' NCAA Football series managed to break the rather disappointing mold however for the month of July in the US.

"NCAA 12 was the best-selling title for the month, realizing a 15% increase in unit sales versus NCAA 11 in July 2010. The increase in sales could have been fueled by ardent football fans who have to wait a little longer to get their hands on Madden this year."

The Xbox 360 console finally saw a dip in sales after months of huge gains. "This was the first month that the Xbox 360 saw a year-over-year decline since December 2009. This is more of a reflection of robust sales last July, which was the biggest month for unit sales of the 360 in 2010 outside the holiday months (November and December)," they added.

"Last year’s sales of the 360 hardware platform were driven by the introduction of the Kinect-ready slim form factor SKU." It seems the honeymoon Kinect period is over.

Comments

By unsilviu (SI Core) on Aug 12, 2011
unsilviu
So basically game sales aren't dropping, we're just seeing the online sector growing (as it should)
By nocutius (SI Elite) on Aug 12, 2011
nocutius
Well i buy most of my games online, not much need for retail. I haven't completely stopped buying at retail yet, but i wonder how long until that happens.

The biggest problem of digital sales is the fact that kids usually don't have credit cards, if they figure out a way around that retail is in big trouble.
By unsilviu (SI Core) on Aug 12, 2011
unsilviu
That's not really a problem either, since parents should do most of young kids' shopping anyway. It's just the pleasure of having a big box with a manual and glossy art, and that smell of plastic that still makes retail special. Digital obviously has non-sentimental advantages, and is replacing it, however.
By PowerJack (SI Elite) on Aug 12, 2011
PowerJack
"It's just the pleasure of having a big box with a manual and glossy art, and that smell of plastic that still makes retail special."

That's like drinking a can of coke, it's so much better than the fountain one.
By JonahFalcon (SI Elite) on Aug 12, 2011
JonahFalcon
Gee, what a coincidence that the "worst period" comes with the utter collapse of the Wii.

Note to analysts: Xbox 360 sales are up. PS3 sales are up. The Wii is toast.
By herodotus (SI Herodotus) on Aug 12, 2011
herodotus
@nocutius
Don't need a credit card....just a normal Debit card linked to Visa, Mastercard etc. Easy as pie, as the young 'uns are finding out when Mum and Dad give themm access to their own bank accounts.
"Worst period" - nah, there's much worse to come...look at the GF situation.
By neilmike (SI Core) on Aug 12, 2011
neilmike
i don't think i really care too much about the physical retail gamestore 'cos these days it's nearly all digital distributions so why concerns about retail box sales is failing badly...
(maybe we haven't got any room to stack them anymore)..lol

True, digital downloads are taking over !!
By herodotus (SI Herodotus) on Aug 14, 2011
herodotus
...and so are their ridiculously high prices now that they are.
By unsilviu (SI Core) on Aug 15, 2011
unsilviu
The prices differ by region. As I've said before, it's actually cheaper to buy online, at least here in Easter Europe. I suspect it's the same for all poor countries.That said, the price is indeed much higher considering the producer no longer has the expense of package and publisher.
By bosnian_dragon (SI Core) on Aug 16, 2011
bosnian_dragon
As there's no need for classical distribution, packaging and other logistics, the price of the games should be lowered significantly. BUT, we're witnessing the same prices even if they went digital...