Awful April game sales baffle analysts

Webush's Michael Pachter wonders if "something is terribly wrong"; EEDAR's Jesse Divnich optimistic, but says slump puts incredible pressure on E3 Natal, Move, 3DS showings.

by

Yesterday the industry-tracking NPD Group released its sales figures for the month of April, showing that US retail gaming revenues tumbled 26 percent year-over-year for the month, far underperforming even the most pessimistic of Wall Street predictions. The response from analysts was swift and tinted with more urgency than usual.

With April sales slipping, a strong E3 showing for new hardware is even more important than usual.

In a note to investors, Wedbush's Michael Pachter called the results "baffling," adding they left him speechless. Undeterred, the analyst delved deeper into what the sales mean for the industry.

"It's easy to blame the lineup, which was quite light (Ubisoft’s Splinter Cell: Conviction was the only AAA title, and it was an Xbox 360 exclusive), but the results suggest something is terribly wrong," Pachter said.

He continued, "Unfortunately, we are at a loss to identify precisely what was wrong, given relatively robust sales for the three months prior, decent weather, an improving economy, and a deep catalog of recently released titles…As we cannot explain the reasons for the shortfall, we can only conclude that April was a fluke, with many core gamers enjoying recently purchased games and looking forward to new releases coming out in May."

Electronic Entertainment Design and Research's Jesse Divnich acknowledged the numbers could be described as depressing, but he emphasized "the future remains bright for the industry."

"However, this does put an extraordinary amount of pressure at this year's E3 event to demonstrate that these new technologies can rekindle excitement among mainstream and core consumers," Divnich said. "If these technologies fail to generate the excitement and anticipation needed for medium term sales performance improvements, this may accelerate the completion of this current hardware cycle."

For 2010, Divnich expects gaming software sales to be roughly equivalent to 2009, with hardware and accessory sales slipping 4 percent year-over-year. However, he said if Move, Natal, and Nintendo's 3DS don't show well at the Electronic Entertainment Expo, software sales for the year could slide into negative territory.

Discussion

623 comments
Sindri0x
Sindri0x

Sales will definitely pick up as the year goes; we've had way too many AAA games (and other great games of course) across a year and a half (start of 2009 to now), so I think the gaming world is just taking a break. That, and the only AAA game for April was Splinter Cell, and that's an Xbox exclusive. Sales will definitely kip up as the year goes on, as they probably already have with SMG 2 and Red Dead Redemption, but there's way more to come; Halo Reach, Gran Turismo 5, Starcraft 2, Last Guardian (if it comes out this year) just to name a few. Personally too, I think this may be the year when the PS3 eclipses the 360 in hardware sales, despite the advent of Halo Reach. Gran Turismo 5 is in itself a system seller, and if Sony gets behind Last Guardian (which it will) and markets it to families as a family oriented (but not kiddy) game, I think they can definitely own up. Then again, I'm the one that thought the PS3 was going to bow out last year; how wrong I was.

AdamProject
AdamProject

I agree with Shadow_Fire41. We need a challenging game from days of old~ For example? I found reliving Guilty Gear & Street Fighter 2 more fun than Super Street Fighter 4. Shame on you, game companies.

Shadow_Fire41
Shadow_Fire41

heres a thought, lets actually TRY when making a game, and ignore the gimmicks and casual gamers.

terpriders
terpriders

April didn't prouce any major titles. I still play the games I bought or received in December and January. I just bought Red Dead Redemption and looking forward to Backbreaker. The industry is in good shape, consumers are being smarter by not buying garbage games.

GOR_TAK
GOR_TAK

Really? Baffling? How about most games are over priced crap and people are tired about being nickle and dimed to death at every turn by greedy developers (day 1 DLC, new used game on-line charges, exclusive DLC depending where you buy a game from etc etc etc)

fionndruinne
fionndruinne

Perhaps this year's good, even great, game titles are causing gamers to hold off on buying the cheaper, lower-quality fodder that usually supplements game charts. I know Mass Effect 2, FFXIII, Bioshock 2, and, later on, Halo: Reach will be enough to keep me more than happy gaming-wise for quite some time...

Sins-of-Mosin
Sins-of-Mosin

Anyone else think Sony's motion controller should be called Vibe because it looks like a women's pleasure device? Big ball shape that glows..... good luck with that.

your-exhellency
your-exhellency

rich s.o.b.'s wondering why poor people have no cash to buy over-expensive sub standard shoddy games. makes me puke!

pineapplearmy
pineapplearmy

Many of you are talking about the economy as the reason for this sales drop, but that doesn't make any sense. The headline is that sales are down 26% compared to last year. If you don't remember, the economy was pretty bad last April too. That's why this is shocking to investors. The economy has improved some (more in some places than others) since last year, but game sales are way down. If it was the economy what we'd see are flat sales. With many retailers showing improved performance in recent quarters, I'm sure many investors thought that game sales would even be up a little. The result is concern on the part of people with money invested in gaming companies.

Subcelsious
Subcelsious

Did these clowns factor in that the american economy has $%^& the bed ? 3 of my neighbors are out of work, i have my own bussiness and no calls anymore , i have to wait for the economy to recover......oh wait i forgot about foreclosers and morgatges that increase 1,000$ overnite. who has 60$ to throw down on a game these days?

Hvac0120
Hvac0120

Did any of the analyst think about Graduation and Summer Vacations as reasons people slow down their purchasing at this time of year? I'm sure there are many factors into "why." I doubt the industry is in trouble, though.

ohjtbehaaave
ohjtbehaaave

May and June sales will explode! All the great games were pushed back a little this year.

robjones2112
robjones2112

I didn't buy any this month but the I bought Mass effect 2, ff13 and just cause 2 in march so i had plenty to get on with

malverick
malverick

I don't disagree that piracy plays a part in lost sales. However I think people are too quick to blame piracy, and not the fact that the prices of new releases are extortionate and are too highly priced for most people, including myself. I don't buy games at release time, because I don't want to spend £35-50 pounds each time. I wait until a game is at least £20 or less. Also, from comments I see on Gamespot, most people seem to rent games. And once EA puts their £10/$10 con on all of their releases, whereby if you buy a second-hand game you then have to pay an extra £10/$10 to unlock parts of the game, I can see sales dropping even more in protest ( I hope, anyway ).

samad5
samad5

This goes to prove indirectly how important mainstream gamers are to the gaming industry in generating sustained sales in relation to casual gamers sucked in initially by gimmick technology. It'll be interesting to know how many active gamers there are now than say compared to the 80's & 90's. You would have thought that the industry would still be growing as vast knots as gamers of yesteryear are joined by the new breed. Judging however, by the average volume of new gen hardware sales that doesn't seem the case. The PS3 + 360 sales still don't add up to the PS2 so clearly a lot have either moved across to Nintendo or simply have not upgraded hurting sales of new software.

delta3074
delta3074

nothing baffling about it, everyones saving up or making sure they have the money to get RDR, that was my reason for not buying a game in april anyway.

method115
method115

I haven't been really interested in buying a game since Mass Effect 2. I've beaten it once and now I'm taking my time on insanity mode. The next game I'm going to buy are used copies of Magna Carta 2 and Resonance of Fate. UFC 2010 and Alpha Protocol might get me but I highly doubt it.

Casey1967
Casey1967

There are alot of reasons April was terrible. The lack of decent new releases was the most significant. In order for customers to buy games stores have to have money to buy them to sell to you. They don't have it. And neither do you. If a customer is going to spend some of that hard earned cash it had better be a good game. Also, why buy a new game when there are so many great older games out there for 1/3 of the price that are better. Piracy is a major issue and will get worse. As a reseller myself since 1986 I can tell you it's the worst it's ever been. I have no confidence that the massive publishers are capable of wrestling with the demons. I also think the big box stores are hurting and we'll see some surprising deaths. Sorry to depress everyone but in the short term (2010) it's going to be painful for all of us. PS. if you love games buy them from a small local store that gives a crap about you and games.

pelvist
pelvist

Conviction wasnt a 360 exclusive.

redskinStu
redskinStu

Personally, I think it could be a little something called "Recession" that has been talked about. Also, $70 price tags for games, $60 price tags for controllers etc. May have a little something to do with the slump too, especially when people are losing their houses. Except, of course, for DJ Hero and guitar controllers. they're available for a bargain.

GameBeaten
GameBeaten

@Crimson_Erskine Whoa, whoa, whoa! Who the **** said I couldn't play today's games? Don't be ignorant and assume that kind of stuff. I think I could have been more clear on what I meant by "simpler." I mean, if you compare the gaming industry today to how it was 10+ years ago, you could say it was "simpler." Also, why would I still be gaming if I couldn't "pick up" controls that aren't even that much different even? I also wasn't bashing the current gen of consoles, otherwise I wouldn't still own them. I just gave my opinion on them. One more thing, I'm only 20. I'm not much of an "older gamer."

SDFan18
SDFan18

Guarantee game sales go back up this month with the releases of Red Dead Redemption, Alan Wake, and SplitSecond.

JRETSO
JRETSO

could it be that we are all broke due to the amount of great games that have already come out this year?

TheTenth10
TheTenth10

I'd be interested in the non physical video games sales, I hope it's so low the customers forget about it and never go back

Muteki_X
Muteki_X

@ blakeney That may be true, but how many games were being made back then as compared to now? How many people bought games back then as compared to now? How many games did the average gamer buy in a year as compared to now? Heck, what was the price of a DVD player back then as compared to now? Let's face it; gaming was a much more elite bunch back then. Those who loved it enough to shell out the money may have only bought a handful of games a year at best. Everything else was a $2.50 rental for the weekend. At least for me and all the gamers I knew it was, but we had limited funds to work with. I may have bought two or three new a year. I didn't buy very many used games either. Look at the selection we have now as compared to the limited selection back then. Is the average gamer satisfied with only purchasing a small portion of that spectrum, or are they going to spread their funds to cover a larger area?

Yomigaeru
Yomigaeru

Nothing in April other than Splinter Cell? I suppose then that most of you aren't Monster Hunter fans and don't consider the lastest release a AAA title... At any rate, let's look at the facts. Of all the releases from April, I can only think of Nier, Super Street Fighter IV, and Monster Hunter Tri that got any kind of advertisement on the internet. Checking out GameFAQs, there seems to have been a bit of "no-name" releases on Wii, and a host of downloadable games elsewhere. Putting aside the obvious shovelware factor, how many of those attracted any consumer awareness at all?

BaBaBaBen35
BaBaBaBen35

"If these technologies fail to generate the excitement and anticipation needed for medium term sales performance improvements, this may accelerate the completion of this current hardware cycle." Music to my ears... I've had my Xbox 360 over 4 years, and it's very well used, I just don't think it will last another 2. Let's make sure "project stupid" I mean "Natal" fails so we can get a nice new Xbox already.

JukedSolid
JukedSolid

seriously. it's pretty obvious sales will be low when there aren't any new games that anybody actually wants being released

cleo2525
cleo2525

reasons why this could be 1. no decent games to buy in april 2. people dont have the dosh wether from buying games the month before or other reasons. 3. people like to wait to get it whe its reduced 4. people buy online from ebay etc 5. people borrow or go on their friends copy 6. they dont buy the game on release because dont have time to play 7. dont buy because they played the demo and it was crap 8. dont buy because heard the main game is very VERY short 9. games are costing alot for less and less hrs of game play 10. if its a xbox they get pirated games hmm am sure there are atleast another 100 reasons haha

kwanzudood
kwanzudood

I'm looking forward to when we have analysts who actually were part of the gamer generation and can follow the actual gaming industry to interpret results. Instead, it looks like these guys are using general entertainment industry knowledge to interpret the results. Gaming isn't like going to the movies or buying music, its more of an monetary investment up front and balanced with more hours of entertainment vs. other entertainment mediums. Also, its not just a matter of people having limited finances to actually spend money on games, it also comes down to whether or not they actually have time to play. There's only so many games that people can play in a set amount of time, there were so many AAA releases in the first quarter of the year that people are likely still playing them or playing their multiplayer components.

Phil-teh-Pirate
Phil-teh-Pirate

E3's motion control eeeextraaaavagansa will be the death of the game industry. Welcome to the age of casual throw away games.

orange_monkey_1
orange_monkey_1

Everyone's probably just saving up for Red Dead Redemption.

peetowser
peetowser

*ahem* Release more games in April instead of craming all the releases in March next time... Seriously, do they really pay these "analysts"?

cleo2525
cleo2525

i agree most games dont last as long as the should because they seem to be focusing on the multiplayer part and forgetting the largest majority of gamers actually dont play online. the biggest dissapointment for me was alan wake so dont worry ps3 only owners you havent missed out on anything at all, its a really short and very simple game which gets boring after the 1st hr and half.

keyboarder20
keyboarder20

why is that guy so surprised ? games are expensive, games offer fewer hours of quality gameplay and above all the large majority of games lack of originality, innovation and novelty. When i buy a game these days i have a feeling of been there, done that got the t-shirt. Sorry but the game industry need to rething its strategy and offer something really exciting and new, otherwise the beginning of its end is about to star..

motopsycho650
motopsycho650

I was playing FF13 for the entire month of april. I bought it and GOW3 in march, and 3D Dot Game Heros in May. I could have cared less about anything else.

pineapplearmy
pineapplearmy

For Blakeney: You can see into the future- posted release dates. They are not written in stone, but you can see several months out what the landscape looks like. It does often take more than a year to put out a good game, so it wouldn't be hard to delay a release, polish it further, and release it in a favorable period. Halo Reach beta is out, that seems like a great time to release a game from another genre like puzzle or RPG that could capture sales from those not interested in FPS. Especially a quirky title that could use the extra marketing boost from coming out when nothing else is releasing. I don't actually own any game stocks (unless my 401k does). My point was that there does seem to be a lack of foresight on release dates when some good games have come out at times when they were totally overshadowed. Considering the state of the market over the last couple of years it would seem that you would want every advantage for your game.

James00715
James00715

It's simple. Everyone's playing the betas. Halo: Reach for console owners. Starcraft 2 for PC owners. Both are "closed" but anyone can get an invite by paying at a store (buy Halo 3: ODST or buy SC2 preorder). Combine this with the fact previous months had such good games and no one needed to buy anything in April.

LAboy06
LAboy06

The only game I bought recently was my preorder for Red Dead Redemption..May sales should be good atleast lol.

cleo2525
cleo2525

im not sure because pc game sales are pretty low they prob dont even count them if you walk into most of the game shops in the UK they now only have about 5 shelves of pc games the rest of the shop are console games

Chubb001
Chubb001

"(Ubisoft’s Splinter Cell: Conviction was the only AAA title, and it was an Xbox 360 exclusive)" PC doesnt even count these days?

velocityu
velocityu

Nothing to be confused about: Great games the months before April + No good games in April = terrible month in sales. I am still playing GOW 3, MW2 and Battlefield 2 They should have just ended the article at: "It's easy to blame the lineup," it's easy to because... it's true

Pyromaniac210
Pyromaniac210

Did it occur to none of these analysts that part of April's poor sales, at least on the 360, could be attributed to people anticipating the release of the Halo: Reach beta and therefore delaying any purchases until after the Beta was over? Or that earlier in the year was full of such huge releases that people didn't make many purchases in April because they were still playing games like Bad Company 2 or Final Fantasy XIII from March?

cleo2525
cleo2525

i dont think people today would pay more than £60 for a game you can get a 360 for £150 lol personally i wait till the games have gone down in price before i buy or i get them from ebay

blakeney
blakeney

"something is terribly wrong" Muteki_X "Yeah, it's called paying $60 for a game." Games were £20 ($28.97@ todays rates) more expensive in the 90's on Snes! As i have said a million times here before, the likes of DonkeyKong Country and Killer Instinct were £60 retail ($86 @ todays rates)

PixelAddict
PixelAddict

I think simple things like potato chips and breathing baffle Pachter. What a tool.

blakeney
blakeney

pineapplearmy "If the period was so weak for AAA titles, then why didn't the company I own stock in plan a release to take advantage" Seeing as you own stocks in the said company, you understand it takes(a) year/s to make a game. They would have to have someone that can see into the future to take advantage?

AirBizkit89
AirBizkit89

know what sets ps3 aside from the competition the competition doesnt have the no life app *home available now, the fans rave home is so real! i never leave it either! love balls? moving to store near you its ps move itll move you outta your fame of minddd!!! it glows! it moves! its for you! comes with all new baton twirler game. coming soon.

cleo2525
cleo2525

Maybe they should start making alot more decent games and not total crap like dark void was lol after the demo i never bothered to buy it, a demo is there to sell the product and make you want it, that demo did the oopposite and i played a bit of my cousins copy of it and im glad i didnt buy it