Analysts predict June gloom for US game market

Wedbush's Pachter expects 8% decline; Lazard's Sebastian forecasts 15% drop; Red Dead Redemption, Super Mario Galaxy 2 pegged as top sellers.

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Prior to NPD's delayed report on non-PC US game sales for May, analysts were bullish on the month. Many thought it would see improved sales, thanks to the releases of such blockbusters as Super Mario Galaxy 2, UFC Undisputed 2010, and Red Dead Redemption.

Analysts predict Red Dead Redemption will ride high again on the June NPD charts.

They were wrong.

The week before last, NPD reported that sales of combined software, hardware, and accessories sales actually declined 5 percent during the month compared to May 2009. As a result, analysts issued dreary after-action reports, with Wedbush's Michael Pachter going so far as to say the domestic game industry may be in a permanent decline.

With June's numbers expected Thursday afternoon, analysts are now taking a more conservative tack. "We forecast software sales of $575 million, down 8 percent compared to last year's $627 million," said Pachter in a note released today. "Despite improved June hardware sales of Xbox 360 and PS3, we expect June software sales to be down due to a difficult dollar comparison, a disappointing May (up only 4 percent despite a strong release slate), and a lackluster release slate."

Pachter attributes the hardware increase to the introduction of the new 250GB Xbox 360, which launched in mid-June. He also pegged Red Dead Redemption and Super Mario Galaxy 2--two of May's top titles--to be amongst the highest selling games in June.

Lazard Capital Group's Colin Sebastian was even more pessimistic, auguring an overall decline of 15 percent. "Beyond ongoing sluggish game sales, the primary reason for the decline in sales is the lack of significant new releases during the month. While catalog sales of Red Dead Redemption remain healthy, according to our retail checks, we believe that sales were a bit soft for newer releases, including Blur and Tiger Woods [PGA TOUR 11]."

That said, Sebastian predicted software sales would be up by 15 percent, and that hardware sales would be "stable" year-over-year. "Our checks also suggest somewhat improving availability of PS3 hardware, while the new 360 Slim and steady sales of Nintendo's Wii should generate flat to slightly higher hardware sales versus May. We do not expect a significant increase in handheld unit sales until the launch of the Nintendo 3DS (we expect Q4 in Japan and Q1-2011 in North America)."

Discussion

136 comments
motorola29
motorola29

@my haters someone insulted me and said there's only 2 gears of war games. play gears 1 & 2 side by side and tell me what's so special different about 2 to make you spend $60 on it. and yes mario is a milked franchise like anything else but at least some of the new mario games are improvements over the others and not just thrown together for full price like CoD, Halo, Madden, any other annual game. the entire year of 2010 has been summed up by metal gear, red dead redemption and bayonetta. nothing else is worth the time.

nonfanboygamer1
nonfanboygamer1

What do they think? Consumers are just gonna buy every new game release? Games are $60 each, with that price more people hold out for the games they really want. Hint, Hint, Lower game prices, and sales won't be "Gloom and Doom".

ihatespam04
ihatespam04

Remember that guy in school that you hated because he was so FOS about how rich he was and how he spent his summer vacation? Well those guys become analysts.

Richardthe3rd
Richardthe3rd

The fact that Michael Pachter isn't panhandling for Vodka money under the Santa Monica bridge is evidence that there is something very, very wrong with this world.

hoganms
hoganms

You need an analysts to predict "June gloom". Wow they're good. Could be the fact that...nothing is coming out for a while.

monson21502
monson21502

only time these fools get money off me is when i buy a new system. after that i just buy all my games used for 12 bucks each

monson21502
monson21502

the 360 slim says hi.. no way 360 sales will drop

battu1
battu1

@JohnisGodd lol i live in finnland and its for the first time in this century 30+ so im outside all the time

Kayweg
Kayweg

I predict a december gloom for the US swimwear market..... Analysts, eh ?...geeez

JohnisGodd
JohnisGodd

@battu1 Oh yeah. I forgot how the rest of the U.S is.In Arizona there is no such thing as outside fun during the summer.

Cillerboy
Cillerboy

i shud be an analysts but then i'd feel like a schmuck all the time

AwesomeChange
AwesomeChange

Well duh, because not alot of top-level games are coming out in June-September. I can only think of Other M, Reach, Starcraft II release within July-August-September at this time. Most of the hard hitters for any system are being releasing during the holiday season and after.

ptown58
ptown58

I bought more stuff in June then I had previous months, guess I'm buying at the wrong time.

ptown58
ptown58

"permanent decline. " ?

kavadias1981
kavadias1981

Erm, guys, what rision82 is pointing out is that games are longer than they used to be and as a result we spend more time involved with one game, rather than rapidly moving onto a new one. You all clearly misunderstood what he was saying. He did NOT say that games need to be shorter and he did NOT say that he wants less for his money, he was just pointing out an obvious fact. Yes, GamerLegend10 and Frost259, I'm looking at you. Don't go shoving words in other people's mouths.

GamerLegend10
GamerLegend10

@ rision82 so what your saying...is that u actually want less for your money?

GamerLegend10
GamerLegend10

@Inconnux thats what i do now, except certain games that i cant wait for.

Inconnux
Inconnux

people are buying fewer games because THEY COST TOO MUCH! Of course with the $60 price tag people are going to be a little more cautious. I don't buy games until they go on sale now...

gatsbythepig
gatsbythepig

@Gamespot Please for the sake of pete, stop quoting Pachter. It is ruining your reputation for reporting.

Darkmoone1
Darkmoone1

Thats because barley anything is coming out this summer.

Frost259
Frost259

@rision82 Woah... games do NOT need to be shorter ok, if I pay 60 bucks for something I want my money's worth, and I'm not saying just because a game is short doesn't mean it's not good. But I do prefer game with long single player and great mulitplayer to keep it going.

rision82
rision82

Personally, i haven't buying games for one simple reason. No time to play them all. As a kid, games were shorter, you play them, finishem, buy another one within the same month. Now, i barely have time to finish one is 3 months. Also, games are bigger, longer, and have you trying to get everything single achieve/trophy there was. Ten years ago, you played something like Onimusha or resident evil 3 for liek 4 hours to finish, and then you'd be done

imaidiot
imaidiot

Once Reach is released another analyst will predict increased sales for the month of September...and another will predict a decrease in October and then an increase in November when the Next COD rehash is released. I should have been an analyst.

UdderJuice
UdderJuice

The reason for poor game sales has nothing to do with a lack of good games. It has to do with the fact that people all over America are losing their jobs or having their hours reduced so instead of buying luxury items like $60 games they are saving their money to buy FOOD!

kavadias1981
kavadias1981

Personally I think the reason for a decline in sales is the fact that games are gloriously lengthy these days. 50 hours to complete Dragon Age in my first playthrough (still 2 more to go), 90 hours total play in Yakuza 3, over 200 hours in Fallout3! Not to mention the trophies that we strive to achieve and the infinite plyability of online games (I still play Metal Gear Online even now!). The fact of the matter is, we don't need to buy games as frequently because each one lasts so long.

acerpg007
acerpg007

It's just all blah blah blah.. GOTY: Red Dead Redemption!

RavenXavier
RavenXavier

Analysts don't know jack. If they REALLY knew anything our economy wouldn't be riding the Big Flush into Crap City like it is now.

Gruug
Gruug

What would be expected? Make lousy games or so-called "free-to-play" games or browser based games and you get fewer real sales of games. Last good game I purchased was ARMA II: Arrowhead for the PC and Red Dead Redemtion for the 360. I may get NCAA Football 11 this month but beyond that...nothing till next year.

cornerback3
cornerback3

No major releases = decline in profits Geez, half the people on Gamespot would make better analysts than those people

spike6958
spike6958

This happens every year at this time, do we really need to pay these "Analysts" to "predict" what every gamer could tell you for free, June-September are always lousy months for games because everything is kept back for the few months leading up to the Christmas Holidays when game sales are at there best, it's just basic business.

Shtiv1987
Shtiv1987

The only reason sales will suck is because there are practically no games to be released in the next few months worth get excited for!

edthetinker
edthetinker

Make fewer lousy games. The sales figures will continue to drop, but so will your operating costs.

gbrading
gbrading moderator

Predictions, forecasts, sales figures... I expect the unexpected.

PixelAddict
PixelAddict

@Gelugon_baat Thanks for your post, but my question was more rhetorical. I worked for a business consulting firm for about 7 years, so I know how research is bought and sold. What boggles my mind is why, after so many missteps, would any company put money towards that windbag grade-A knucklehead?? He's never right, and when he is right-ish, it's only because he makes vague claims such as "June might be soft" after several months of soft sales leading up to it and based few (if any) top tier releases. Not exactly "wow reporting" in my book.

b3mb3n
b3mb3n

@ destroyeur Wise Man's Words ... Where do You get them information, man ? I'm just curious ... maybe bit jealous ... ok ok - I envy Your knowledge bout industries and blockbuster-game-analysis ... lol

BAND1Tevolved13
BAND1Tevolved13

These are so stupid, do you really think anyone cares about these articles gamespot? I guarantee that most of us could tell you what months game sales will be better in judging by the releases that come out that month. I would love to get paid to be an "analyst". I am using my own analyst skills to say the month of November and December will see a spike in sales....

Tripleseed
Tripleseed

@destroyeur: Thanks for the insight. I feel truly enlightened hearing all that from a TRUE industry analyst.

destroyeur
destroyeur

The Mario Galaxy franchise will never be a a blockbuster, Super Mario is. Read Dead Redemption isn't a blockbuster game, GTA is. Anything UFC related will never be a blockbuster, Starcraft 2 and GT5 with lot of replay values are.

wwlettsome
wwlettsome

Speaking to overall industry totals while interesting trivia and gives people something to cry in their beer about when the overall numbers are down. But when you consider what's going on in the gaming world right now it's not too surprising that numbers would be down. Weak release slate + hardware in transition (new PS3 and Xbox 360 bundles coming later this year with motion controllers) = people not buying now. Also I think Pachter needs to be medicated. He's continually screaming the sky is falling or things will be the best ever. Somebody buy this guy a perspective pill.

ThAdEa82
ThAdEa82

@ Lostboy1224 - exactly. thats why the consumer is always passed the buck instead of them taking the hit...they want their jet NOW!

Lostboy1224
Lostboy1224

I love when people complain about being moderately rich this month compared to extremely rich. "Ohhh no! We only made 400 million dollars compared to last month's 500 million." I guess they'll have to put off buying that private jet one more week.

de_graph
de_graph

Games are bigger than the movie industry now and generate more revenue. Which is why there are some game agencies which have over 200-300 employees. With such huge overheads, game companies need to lockdown a gauranteed income and pay huge dollars to analysts to crunch numbers and stats. Video games now are a serious business, hence why majority of game releases are the same ole thing wrapped in a new package - investors want their money and game companies will produce whatever to make sure they generate that money (leaving creativity and innovation as a secondary task). Which is why, in my opinion, games like Machinarium/ Grim Fandango/ Deus Ex are by far more focused on creativity and the game as a whole... than majority of the recycled games which are constantly hitting the market today. Just my opinion though

Nihonjinjanai
Nihonjinjanai

I love the summer gaming drought. It gives me a chance to catch up on all the games I missed during the holiday boom, when it seems like 50 awesome games come out on the same day. I finally started to play Demon's Souls and Little Big Planet.

Heshertonfist
Heshertonfist

"...a disappointing May (up only 4% despite a strong release slate), and a lackluster release slate." Way to contradict yourself there GS.There haven't been many good games released lately, so the sales reflect that. Do we really need analysts stating the obvious?

SicklySunStorm
SicklySunStorm

Red Dead deserves it - best game this gen IMO. I hope they do some episodic content a-la what we got with GTA IV... I know we have some upcoming Red Dead DLC, but I want to hear more about other characters/families in this universe. Surely Marston has a few crazy relatives throughout the west who's roles we can reprise in Marston's absence?

OmegaGear
OmegaGear

@NoDzombie These analysis are for investors, who don't have the time or the knowledge to expect this based on titles being released.

krytorii
krytorii

if publishers have really good titles ready to release now, they'll probably wait for the run before christmas. Summer is the time for film blockbusters, toy story 3 anyone?