Analysts: March sales slump will likely continue

GTAIV sparks pessimism among industry watchers about a near-term return to US sales growth, but they aren't pushing the panic button, either.

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Yesterday, the industry-tracking NPD Group released its figures for US retail game sales in March, and the data showed slipping sales on all fronts. Overall gaming revenue was down 17 percent for the month, with hardware, software, and accessory sales all shrinking. Today, a handful of game-industry analysts reacted with a measure of concern, but not panic.

Clearly, GTAIV casts a large shadow.

"Of course we should be concerned," Wedbush Morgan Securities' Michael Pachter told GameSpot. "Down 17 percent is pretty significant, and it's the first double-digit down month since May 2006. The trend has been so strong on the positive side that a reversal like this has to signal something."

However, Pachter noted that the March numbers need to be put in a larger perspective. He said that the game sales in March of 2008 were the highest of any nonholiday month ever, adding that last month's disappointing sales were still the third-best ever outside the holiday season. It didn't help that Easter weekend and its corresponding sales bump fell in the NPD's April reporting period this year, instead of March like last year.

"It's entirely possible that we were just up against an impossible comparison, and the Easter shift probably contributed 2-3 percentage points to the decline," Pachter said. "However, down is down--we're looking at a comparison to Grand Theft Auto IV in April, so it's likely that April will be down as well."

In a note to investors, Pacific Crest Securities' Evan Wilson also pointed to the Easter shift in explaining why new hardware and catalog software sales were below expectations in March. Looking forward, it might not just be Grand Theft Auto IV that threatens year-over-year sales growth. Wilson said that comparisons would be difficult for some time to come, noting that last year's April through July numbers saw monthly growth of roughly 40-70 percent.

Lazard Capital Markets' Colin Sebastian's take on the numbers were very much in line with his fellow analysts. He told GameSpot that March sales were "below expectations, but not a disaster," and echoed sentiments that growth would be difficult to come by in the next few months.

"The video game industry continues to exhibit a challenging pattern of sales concentrated among a small group of top-tier software publishers and the first-party platform holders, leaving little room for second-tier video games," Sebastian said in an investors note. "Importantly, we continue to expect the next several months will exhibit year-over-year declines before rebounding to positive growth in [the second half of 2009]."

Discussion

80 comments
cocomacoco
cocomacoco

The trend has been so strong on the positive side that a reversal like this has to signal something." , of course it means something, all of you big game developers pushing the envelopes on gamers like if we were all millionaires, and launching crappy and unfinished titles all over the place since mid quarter last year, a good game will sell, period. no matter how bad the situation is, people will bang their bucks on the best value outhere, and that's definitely not GTA IV. 10 out of 10 was not deserved here, sorry, but this IMO, and many other gamers i know, is the worst GTA ever.

pszone
pszone

well res5 and streetfighter 4 and killzone 2 and godfther 2 big names and were big hits this year will not doing good in the uk with games and so on with the ds? so why did ppls buy a will for well for old ninendo games of course but this year taking it easy with games since all the big ones was out all year all the new ones will flop wont see daylight with squel of a new game

vietboi89
vietboi89

maybe if there was a reward for game of the month companies would try harder to make better games?

sunnystarz
sunnystarz

1 out of 10 are unemployed nationwide.... there are better things to spend money on... like food....

MoonMarvel
MoonMarvel

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MoonMarvel
MoonMarvel

[This message was deleted at the request of the original poster]

zmbi_gmr
zmbi_gmr

I'm not saying that I'm going to purchase what the average gmr will be purchasing this year, but honestly I may buy more this year than I did last year. Already bought SF4 & RE5, and am definitely getting the following games on day one : Bioshock 2, Uncharted 2, A.C. 2, Ratchet and Clank : Crack in Time, God of War 3 (if it's released this year), The legend of Zelda: Spirit Tracks, Wii Punch Out and then there are the games that might be worth a purchase like Prototype or inFamous...Also I will eventually pick up KZ2 which I should have already purchased by now. That's about 8 - 12 games just off the top of my head. Looks to be a frickin' sweet year.

gameking5000
gameking5000

And I think it might continue for the wole year until late in the year. There doesn't seem to be something to buy these days...

WaterLord0
WaterLord0

I believe the reason the industry may go down this year is all the big games came out last year. So will have a our drop until the winter as always. Were spending is at its high with all the best games of year coming out in that time frame. Yet we will have to wait until E3 maybe there wil be a great amount of releases announced form then until summer. If the industry does want to make it seem like the market in slowing down they should release there game spread out through the calender

keitaro0516
keitaro0516

the only game is see myself buying its Fight night round 4 and thats coming on summer xD

Ashley_wwe
Ashley_wwe

Mikethechimp even if you didn't like RE5, you can't call it a bad game.

Dante2710
Dante2710

industry needs less shallow games

8smokes
8smokes

Entertainment will always live on.

Khalathwyr
Khalathwyr

As long as companies continue to go down the "assembly line" method of game production, sacraficing quality for speed of production, eventually the gaming populace will see the poor quality games for what they are and sales will decrease. If software sales decrease, hardware sales will as well as what's the point in buying new hardware to run lackluster, poor quality, shallow games.

asimplerapper
asimplerapper

Expectations of video games is sky rocketing to a level where cost increases, and sales shrink progressively over time.

Mikethechimp
Mikethechimp

Solution? Stop making bad games. Seriously, March was a huge disappointment. RE5 included.

ldonyo
ldonyo

Analysts are useless. Everything will continue to slump until the economy starts picking up again. It's not rocket science.

MoonMarvel
MoonMarvel

@ kbaily You are right, unless I get rich I will only buy used games with a warranty. Of course GTA 4 was a sound buy.

LURCH87
LURCH87

the economy is in the toilet that's why:(

Beastcake
Beastcake

Its the same as last year.. no biggie. It will roll over in the coming months.

skinny_man_69
skinny_man_69

Guarantee June changes things. Fight Night Round 4, Batman: Arkham Asylum, Sims 3 and Rock Band: Unplugged? Smells like change is in the air

parrot_of_adun
parrot_of_adun

@"Unholy_Terror" ACTUALLY, it's not so much theft as it is illegal duplication.

Unholy_Terror
Unholy_Terror

Yay for people stealing games!......Now I'll get pissed if the pirates come out and talk about how they aren't stealing but how they're "sticking it to the man"

xSithiSx
xSithiSx

wow parhar, i bet you get all the pu$$y rollin' your way when the ladies see your modded 360.

parhar67
parhar67

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kbaily
kbaily

Gaming is an expensive hobby and I know of more and more people who want to get a game but simply can't shell out the money for it and will wait until the price drops to $20 or they can get it used. Really how many games do you really need that badly that you have to throw down $60 that you'll more than likely beat in a week anyway?

xSithiSx
xSithiSx

oh boo hoo. Hekynn you really think this is hell? I'd hate to see what you would do if this was Iraq or Somalia.. one of those countries. We Americans haven't seen hell yet.

Hekynn
Hekynn

Well ya some people can't buy games all the time. They gotta save and pay some bill's first then they can buy some games to relive the stress from the market mess that Bush and his admins and greedy ceo friends put us in this hell!

pureskull123
pureskull123

@xsithisx i totally agree with you. If gta san andreas had those graphics, the story would be diferent. No tanks, no jets. less fun.

Windblade91
Windblade91

obviously no major titles have been released that would cause a overwheliming sell we have so many FPS's that ppl can wait a bit longer to get the newest one WTB FFXIII and Versus XIII xD

xSithiSx
xSithiSx

GTAIV just wasnt good enough for me, San Andreas is an example of what a GTA should be. In S.A the missions ranged from taking turf, flying jets, and chasing rappers in dune buggies. In GTAIV the missions range from "go shoot this guy" to "go throw a molitov cocktail it this guy", it just didnt have the content like San Andreas. Well, thats what you get for making a great game :)

gameweasl
gameweasl

There is just so many good games to choose from, so I use a service like Game Fly instead of buying games. If I like it they sell it to me for 35% off the brand new price. Even new releases.

FireFox67
FireFox67

there have been good games, I think the problem is, there have been to many games of one type an not of overall types, like, there have been a lot of FPS games that were release in the past moths and good ones, the problem is that not everybody that has a game console buys FPS, some other people like rpg or strategy games, and those types haven't been realese lots of games of... and there's still the money problem right now so, I think those two things explain this problem but things will get better :)

Jebril
Jebril

Well there aren't any really good games in the last month or two so that might explain some things...

edub272
edub272

Its all GTAIV's fault.. there no way they'll beat LY.. oh no lol. Seriously tho, make some good games - thats the only way sales are gonna go back up, they cant keep depending on holiday season sequals for profits

corwinn01
corwinn01

If they would put out some better RPGs and quit rehashing racing and sports games then there might not be a slump.

kavadias1981
kavadias1981

There are a number of games that I would absolutely love to buy right now but I just don't have the money. I'm sorry, games industry. I realy want to support you but what can I do??? Hmm... this kidney doesn't seem up to much...aha!

ScionofEntropy
ScionofEntropy

It's like we keep hearing: Things are going to get worse before they get better, but they will get better.

Waffen_SS84
Waffen_SS84

Well, maybe they should consider releasing good games for a change...

actsai
actsai

I missed the days where each game title is good; you don't have to worry the fact that Tank War you plop $40 down might be a lemon. Now considering CNC RA3 expansion is such $50 lemon...

mc_snap
mc_snap

its misleading when site post game sales slump ... supply and demand ... once everyone gets the hardware they want then its a matter of the big titles that come out that everyone gets on all platforms. When they have huge massive sales when a couple great multiplatform games come out and then no huge titles for a few months you dont need a crystal ball to tell you that sale will be down.

LindBergh2007
LindBergh2007

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funky_facon
funky_facon

@ soroosh1985 wow... you must've played very few games in your life.

steedle
steedle

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Red122
Red122

Well it will slump. This will have no effect on my gaming whatsoever. And to all of you who feel the same and will preorder. GAME ON!!!!

athenian29
athenian29

I miss the days when we could feel happy just because we could. Do you?

saintsrowCS
saintsrowCS

Well like most people said there weren't any games I really wanted to get this month (next month things look as though they might pickup) which is something analysts don't seem to factor

soroosh1985
soroosh1985

ahhhhhh. GTA 4 i think the best game of all time

grigjd3
grigjd3

Oh, and a slump compared to last year but the third best month in history without a major holiday? That sounds pretty good.