Analysts mixed following sickly July sales

EEDAR's Jesse Divnich and NPD's Anita Frazier weigh in on 29% monthly decline--and whether the industry can pull out of its slump before year's end.

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The industry-tracking NPD Group released its US game sales figures for July 2009 today, and the numbers were down 29 percent overall. Game accessory sales were the best-performing segment of the industry, and even they were down 12 percent year-over-year to $130.97 million, off from $149.49 million.

Divnich says Guitar Hero has peaked, and Activision knows it.

Electronic Entertainment Design and Research analyst Jesse Divnich told GameSpot that the numbers reinforced the notion that the recession has begun directly impacting the industry. The analyst had expected software sales to be down 10 to 18 percent anyway based on historical sales trends like prior month sales and review scores, but the actual 26 percent drop suggests that some larger force is hindering the industry.

While Nintendo's evergreen titles like Wii Fit and Electronic Arts' EA Sports Active made the month's top 10 sales chart, Divnich said it was the casual segment of the market that posted the most disappointing results. He pointed to Wii Fit's steep month-over-month drop, selling just 164,300 copies after last month's much stronger 271,600. And while EA Sports Active's 96,800 was enough to close out the top 10, Divnich said it was the first time this year a title failed to reach 100,000 yet still managed to make the top 10.

NPD analyst Anita Frazier held out hope that the rest of the year could turn the sales trend around, pointing to this month's launch of Madden NFL 10 as a game that could spur sales and looking ahead to The Beatles: Rock Band, Halo 3: ODST, and Call of Duty: Modern Warfare 2. Even so, she said the industry would need to be up 11 percent for the rest of the year in order to break even.

"Of all genres, the music/dance genre has suffered the greatest declines this year, with nearly $390 million less revenues than the same time period last year," Frazier said.

Divnich acknowledged the slide, but didn't see it as a necessarily ill omen for this holiday season's glut of rhythm games, including DJ Hero, Lego Rock Band, and Band Hero.

"Probably the single greatest factor that drives sales in the music category is marketing," Divnich said. "This is an audience that doesn't go to GameSpot every day and the best way to reach them is traditional brute force marketing. ... I think Activision has realized that the category has reached its peak and they have one last season to drive this category. The genre's going to be around forever, but we have to face the facts that it has peaked for the time being."

Looking ahead to the August sales figures, Divnich said Madden NFL 10 sales could be a big plus for the industry, even if they're flat year-over-year. His optimism extended to the remainder of the year, saying a strong lineup of games like Guitar Hero 5, The Beatles: Rock Band, and Halo 3: ODST should have the industry in better shape.

"It's not too bad," Divnich said of the current five-month sales slide. "We have to keep in mind the industry has grown over 70 percent in the last three years. So we shouldn't sniff at the fact that we're down a little bit this year."

Discussion

50 comments
MetallicFPSNut
MetallicFPSNut

@ Vari3ty They did mention Modern Warfare 2. You probably just got thrown by the Call of Duty tag right before it. (for your sake though, I hope it was sarcasm) Anyway, I kind of saw this coming. Typically, when the company that's already in the dumps goes even further down, it'll usually spread to the rest of the industry. Sony's been in trouble for nearly a year now(right about the time the stock market fell apart), and the last quarter or two has seen the entire industry spiral down in that same way.

Vari3ty
Vari3ty

How can they not mention Modern Warfare 2 in this? If any game pulls the industry out of its "slump", MW2 will be the one to do it.

marcob_07
marcob_07

I think it was said before...I want to spent $60 in good games... I'd pay $80 to play now Uncharted2, GOW3, Modern Warfare2, Trico , Mario Galaxy 2, Dead Space extraction or Dead space 2, WHERE ARE THESE GAMES? So I bought the first Uncharted, Mirror's edge (cheap) and Little big planet...just this month ( I got my PS3 last december)..to stay with MGS4, GTA4, Dead Space RE5, Burnout, Killzone2, Prince of Persia, LBP MGS pack, Monster Pack, GOW pack, Flow, Flower, Pain with all packs and three new characters, Aquatopia and my wii games....I look at gamespot all days to see i any great game has it realease date bring forth.....just so-so games...I think Dirt2 is the best thing coming before Uncharted2...and this last one I'll get the first day it comes out!!!!!

CVM_123
CVM_123

wow if i wake up one day and find $130.97 millions on my bank account i think i would have a heart ATTACK! xD

Sweendrix
Sweendrix

Well DUH!!!!! Analyst are dumb. Anybody who considers themselves to be an analyst of the video game industry should realize that the majority of game sales do not take place during the summer months. I swear I could out-predict these so called "analyst" any day of the week. In fact, in a graduate school term paper, I smoked them with my predictions for this generation of consoles. Here is a friendly tip for you so called "analyst"...The VIDEO GAME INDUSTRY IS NOT AN INDUSTRY YOU CANNOT PREDICT BASED SOLELY ON THE NUMBERS...ITS NOT GONNA HAPPEN. YOU ARE GOING TO HAVE TO DIG A LITTLE DEEPER...MAYBE TRY MY RESEARCH METHODOLOGY. I have a dated paper illustrating my methodology and the PERFECTLY PREDICTIVE results about the outcome of this generation of video games which can be seen in a 50 page research paper I completed at Morehead State University. It was a Communications Study. Qualitative in nature. To this day, the predictions remain incredibly accurate. Within 2 percent. (For the United States market only.) Confirmation of the completion date can be seen in the digital signature of my uploads to the school, my own email, and my school email account.

dentedhalo
dentedhalo

its nice to see an analyst actually noting that the industry made massives leapes over the past few years and this is just a small drop when looked at in the long term...... always good to see some people still have a perspective on things rather than thoughts of doomsday!!

AirPortugall
AirPortugall

All good games will start coming out after summer. It doesn't make sense to me why all summer long when i have tons of free time i have no good games to play. It'd be like companies releasing games right AFTER christmas...doesn't make sense to me.

Trogeton
Trogeton

Dude soo many complaining, anyone would have noticed the cost of living just went up that is one reason why the price seems to go up, so STOP COMPLAINING, just like in video games, things are not ALWAYS gonna go your way, you either buy it or you don't... this game is gonna be sick let the adults get it with their money and the kids will have to wait till they get a job and will be able to afford it

Cwagmire21
Cwagmire21

The gaming industry should never be booming during the summer. I'd hope people actually go outside when its nice.

solidstein
solidstein

wait till next year when all the real big blockbusters come out ala ME2 GOW2 bioshock2 , ff13 and the list goes on it will bring the game industry back up there arent that many great blockbusters this year like there was last year they all got pushed back to 2010

ThAdEa82
ThAdEa82

"Of all genres, the music/dance genre has suffered the greatest declines this year, with nearly $390 million less revenues than the same time period last year," - No? really? You mean popping out a game every 3 months is going to mean fewer people will buy? Sales will steadily increase and then jump once the huge titles come out. There I said it. Im an analyst now

Ovirew
Ovirew

I think a lot of people are still just now getting their 360s and PS3s too, and going back and buying some older games they might have missed out on in previous years. I got my 360 last October or so, and I'm still finding great games that came out back in 2006. As far as this slump goes, I agree with the last paragraph - the gaming industry grew, and continues to grow, at a pretty fast rate, so even if we are seeing a little decline there I don't think that means much because we have already surpassed expectations. And like everyone said, as soon as the holidays and next year roll around, I think we will see an increase in sales because a lot of big games are on the way. Even Rock Band: Beatles is probably going to sell like hotcakes. In my opinion, the reasons why we are seeing this little slump are: 1. The state of the economy, 2. People are buying a lot of older games, 3. People are being more hesitant to pay $60 for a short game that won't entertain them long enough and 4. The reason why we saw this 70% increase in sales probably has a lot to do with the introduction of Wii and recognition of casual gamers. EDIT: And MMOs breaking into mainstream media also has a lot to do with that 70% increase. (I'm looking at you, WOW!)

im-a-roustabout
im-a-roustabout

130.97 million is all they made?? Geez the industry really is suffering horrendously. I mean I practically wake up in the morning and piss 130.97 million. Gaming is dead as we know it guys!!!! Shut the whole thing down, we're having a nuclear gaming fallout!!!!

UnknownForm
UnknownForm

Recsession and the same games from last month or last year still being selled in store is the cause of this.

nintendoboy16
nintendoboy16

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

svaubel
svaubel

Guitar Hero peaked after 3 lol. And gaming is down because compared to last year we havent had any blockbuster releases pretty much the whole year. And I think that new game prices 60$ (plus a lot more with periph games) are really starting to hurt peoples wallets and more and more people are starting to wait for prices to drop. Most games are not worth 60$ for how short they are these days.

zeroking420_666
zeroking420_666

well the reason for the slump no great games come out in the Summer so when the Fall&Winter realese come out we be out this slump so no worries here.

DP1130
DP1130

I LOVE it how they look for any reason why the industry hurting and neglect the real reason. Sure the ressession may have something to do with it, but when all you have to pick from is slim and none, well your sales will hurt. TRY RELEASING GAMES OTHER THAN THE HOLIDAY SEASON. Morons.

Ilikemyname420
Ilikemyname420

July was a pretty big drought for gaming. I can only think of 2 games that came out the entire month: Wii Resort and NCAA Football. Kinda hard to have games sell when they aren't releasing any.

tupac-makaveli
tupac-makaveli

i say fire the analysts. they're the reason sales are down w/their wrong predictions and scare-tatics.

NuKkU
NuKkU

i knew that the gaming industry wasnt recession proof they are still making loads of money they just will make less now so im not worrying like other people

Cheesehead9099
Cheesehead9099

This just proves that even the games industry isn't recession-proof.

Rottenwood
Rottenwood

Sixty dollar games aren't going away; people need to learn to deal with it. If you want state-of-the-art games, that involves huge development cycles, massive staffing, marketing, quality control, etc., etc. AAA games are massive undertakings and the prices will reflect that. If that's too rich for your blood, there are plenty of great DLC games, budget titles, older ports, and other more affordable fare.

rann89
rann89

The reason game sales are down is because of the flood of posts like this that are scaring everyone into visualizing a horrible economy period (yes, it's bad, but this is unnecessary). If these people would stop trying to terrorize everyone every 5 minutes people wouldn't be so hesitant to buy something every once in a while. Imagine how many people would go out and buy games if they read a news report talking how game sales shot up last month. But no, good news would be boring news, wouldn't it.

rickmaster1101
rickmaster1101

Anticipated games or not, the country is in a crisis, I don't think these numbers are going up by much. I'm looking foward to MW2, but I have to pay 60 dollars for the PC version! Thats unheard of. I think I'm just gona blow the dust off my N64 and take a trip to the past for a while.

popcorn77
popcorn77

I havent bought a new game all summer because nothing has come out at all. I dont see the point in people getting worked up about the decline in game sales when barely anything has come out for the ps3 or xbox thats worth buying in ages.Cant wait for November now

wrake01
wrake01

No kidding sales are down. Barely anything has come out since April. It is utter insanity that all the publishers cram their releases into a 2-3 month period. I do not know anyone that buys more than 2 games at a time. I buy one, and finish it, then when I am ready get another.

itsTolkien_time
itsTolkien_time

I seriously don't think a major release in the summer is a bad idea. Look at Sports Resort, 500K! There simply is no competition, and we gamers are bored. Has anyone ever tried releasing big games in the summer, besides Nintendo? All i know is that i can't buy 5 different $60 games at the same time in the holidays. These analysts know nothing, as many have stated. @Deathmobarez ~ have you converted your prices to american dollars? Game prices differ according currency value in the area, income demographics, and shipment costs. If you have a low currency value and a high income demographic in Norway, you could really be paying only slightly more than us.

bennae66
bennae66

and its not yet christmas

bennae66
bennae66

financial crisis. i think considering those two words the games industry is doing rather well. have we seen government bailouts of sony? have we seen mass layoffs and cutting the xbox team into a 3rd of what it was? have we seen the collapse of nintendo? life is good, games are great.

Deathmobarez
Deathmobarez

@timboutillier Dude, I think 60 dollars is OK for a game. You wanna know why? Because I live in Norway and it costs 100 freaking dollars to buy a game. In America the game is about 20-30 dollars when it becomes old, right? Here it becomes 30-50. Do NOT buy anything if you ever go to Norway. xD

Deathmobarez
Deathmobarez

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

krisr2005
krisr2005

@ DMLSLAT 1.) Your parents understand the current state of things, and they probably wish you'd save your money in the event of something happening and you need it. 2.) Sony won't drop the price until they narrow the loss gap for each system sold, and that won't happen until they lower manufacturing costs. At this stage of the game, profit margin is more important that established system base, if not dead even priorities. 3.) It's less about manufacturing costs, and more about product development. Games cost money to create, expect to pay for their costs and reward them with a paycheck. 4.) The entertainment industry is generally the last industry to suffer, because people rely on it to take their minds off their problems. 5.) Summer is the worse time for notable, critically acclaimed game releases. But sometimes it's not about whats "good" to increase sales and profits. Madden and NCAA are prime examples of this phenomenon.

DMLSLAT
DMLSLAT

I have the money necessary, but there are three problems that keep me from buying gaming stuff, and I want a PS3, so there are a lot of things I want to buy: 1. My parents don't want me buying stuff for some reason. 2. I'm waiting for a price cut (hope you're reading this Sony). 3. Games are $60 a piece! Games don't need to be that expensive, it doesn't cost nearly that much to make that little disc. And some reasons others probably aren't either: 1. Note the economy. The first thing that's going to suffer when the economy's bad is the entertainment business. 2. What's been released in the last couple months that's actually good? I can't recall hearing about something I'd want to buy since inFamous. That's not that bad for me though, since I have some catching up to do... Maybe I should be an analyst...

tarugista
tarugista

Because there is no new RAINBOW SIX!

Fyre8892
Fyre8892

I think people would buy games if there were good titles coming out. Wait for September-November when the quality games start coming out.

monson21502
monson21502

if he has doughts sales picking with games like halo 3 odst,uncharted 2, cod mw 2, guitar hero 5, madden 10. plus the price drop on 360 and the new ps3 slim and maybe a price cut also. this guy is a bigger dummy then we all thought.

trex24
trex24

Yeah, I would have bought some games if I wasn't unemployed for the last 10 months. Now I just play through older games I never finished. Resistance 2 almost done, GTAIV hardly started, Fallout 3 not all missions completed, etc.

Pete5506
Pete5506

They would do better if things were cheaper

Burninat0r
Burninat0r

maybe its cos they're raising prices for video games?

Chief_Kuuni
Chief_Kuuni

its a sad year for work, not everyone has money to spend, I'd buy games if I had the money

robfield
robfield

When are the analysts not mixed? They either make wild guesses, or obvious guesses. I am still confused about how there are actually jobs about guessing stuff.

alkaline_DnB
alkaline_DnB

"Analysts mixed following jaundiced July sales" the analysts are mixed huh? so which ones do i listen to? the ones who make stuff up or the ones who take wild guesses. maybe i'll side with the ones who just pull stuff out their asses.

a_rayment1992
a_rayment1992

Sales are just down because the 09 line-up hasnt been as strong as it was at this time last year. Expect it to pick up later when more of the anticipated games come out.

ShadowXStorm
ShadowXStorm

Recession is already slowing begining to end so I'm not worried it'll probly be another year or so for it to fully recover.

-Celeste-
-Celeste-

These analysts sucks. They aren't gamers and are trying to fortell the gaming market. Stick to analysing markets that you actually know a thing or two about. Even with the new games being released, its just like the Wii Resort this past month. It clocked in at 500k. Do you think ODST is going to have strong month/month sales? No, everyone that wants one will pick one up early and then it will fall to 100k-150k units a month like all the other games. Economy is suffering, gamers are getting picky on where to spend money. This isn't rocket science.

funnysplay
funnysplay

Well i can say one thing, im certainly not getting dj hero, band hero, or lego rock band. They'll half to do better than that if they want my money.

hatieshorrer
hatieshorrer

Business annalist say the recession is going to end soon Im sure the game industry will bounce back with it