March another down month for games?

Analyst predicts a slide of 18 percent from March of 2005; actual NPD numbers expected to be released next week.

Once again, it's time to look at the latest US monthly sales numbers, and once again, investors are being told to brace for steep declines. NPD Funworld isn't expected to release its March 2006 sales figures until next week, but Wedbush Morgan Securities analyst Michael Pachter today provided his own industry estimates, along with some insight into what those numbers would mean, if accurate.

Pachter is predicting that March's US game sales will tally up to $445 million, a dropoff of 18 percent from a year ago. It would be the seventh straight month of year-over-year declines for the industry, generally attributed to dramatically slowing sales on software for current-generation systems that is not yet being made up for by sales for the next-generation platforms (including the DS and PSP).

"It appears that 2006 is following a similar pattern to 2000, when the last console transition began," Pachter told investors. "Consumers have slowed purchases of current generation console software while waiting for the opportunity to purchase an incredible next generation console, the Xbox 360, and its associated software."

Pachter expects Kingdom Hearts II, The Elder Scrolls IV: Oblivion, and The Godfather to lead sales for the month, but doesn't expect any of them to touch the $26 million in sales Gran Turismo 4 racked up last March. The $46 million in PSP software sales that accompanied that system's launch last year also made March comparisons difficult.

With Xbox 360 shortages easing, Pachter expects April to be better than March, but doesn't believe sales of next-generation games will be able to offset the rapidly eroding current-gen sales until Sony and Nintendo jump in with their PlayStation 3 and Revolution consoles, respectively.

"We think that the transition has only just begun, and believe that the worst effects of the transition lie ahead," Pachter said. "Although we expect a brief respite from double-digit sales declines in April, when Microsoft is likely to double the supply of Xbox 360 hardware units, we expect a return to software sales declines over the next several months."

Pachter also reiterated his projection that overall US game sales for the year would be down about 3 percent.

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70 comments
lordcarbo
lordcarbo

I hate to admit it but the Xbox 360 is currently getting all the games as of late. The PS2 and GCN are really slacking. Well, in terms of consoles. In terms of handhelds, both the DS and PSP are doing fine.

thepyrethatburn
thepyrethatburn

For me, it will be a stick with what I've got but not because of pricing so much as other factors.

The first is that I never get a console at launch. Getting a console at launch is paying the highest possible price to be a hardware beta tester with a limited library of games to choose from. The only possible exception to this may be Nintendo. My last Nintendo console was the SNES but, as I understand it, Nintendo still always has a solid launch from a hardware perspective.

The second is that, after years of avoiding the genre like a plague, I've been hooked by an MMORPG. The MMORPG in question is Auto Assault.

The third and biggest reason is because of the games I already have. I've been collecting for a while now. (My first console was an Olympian which was a system from Sears which played variants of Pong. My oldest console that I still own and play is an Intellivision II.) Over this time, I have accquired a collection of video games, a third of which I have never beaten. I have NES games that I still haven't beaten. So, last year, I decided that I would start beating all of the games that I own.

So, for me between Auto Assault, the occasional new PC or PS2 game, and beating all of my unbeaten games, I figure I can skip a generation of games and not miss a beat or be left wanting new experiences. (To be honest, that has been a small problem with me in certain genres as it is. After 25 years of collecting/playing, you do get the idea that, other than graphics upgrades, you've played this game before.)

icemancell
icemancell

hows this possible? obliviion came out in march

daftfan
daftfan

No PS3 and Revolution. No good sales for the video games. The truth hurts.

minerl99
minerl99

thepyrethatburn, I agree with everything you said. Mae West once said, "If I had my life to do over again, I'd make the same mistakes... only sooner". It's hard to tell your kids much these days. Sometimes they have to learn it on there own... Re the cost of the Next Gen systems.... I've played since the days of Pong. The cost of the Next Gen systems is an evolution of increasing revenue and market share of Video games They are a huge part of the entertainment industry. 20 years ago they were a rounding error. Today they are big money. They now capture so much of our entertainment dollar (way more than movies for me personally), that Microsoft and Sony are taking a chance that the higher price point will be more profitable. It's interesting that Nintendo is keeping with the lower price points we've most recently seen. Sony especially is really taking a big gamble (assuming a PS3 will be $100 to $300 more expensive than a 360). There is a saying in marketing, that of Good, better and best, more people choose better. Not sure it will apply to the Next Gen (if it does Microsoft made the right call). I own a 360 and will pick up a PS3 as well. I may pick up a PS3 as well, since I'm fortunate that the cost won't be the determining factor. It would be one or two killer apps that would move me to buy one. SInce many of the titles will be on both, I'd say it's a reasonable chance, that I would just stick with the 360. Don't know yet. As for Blu-Ray. I have 2 big screens, neither of which take advantage of 1080p, thus Blu-Ray or HD-DVD with their limited movie choices would be of lttle interest to me. I get HD via Comcast cable, so I haven't purchased or rented a DVD in 2 years. It's all HD cable and Video on Demand for me. I'd imagine a lot of consumers will definitely be effected by the Next Gen price points and may pick another hobby, stick with what they've got of try Nintendo.

StillWingless
StillWingless

it was a strong game month, and i'm sure sales were up from last month... but it's true that with next-gens coming up, everyone's saving up.

Kravyn81
Kravyn81

"Oh my, how much more of a follower can you be? Go eat a subway sandwich Jared." - mpalacio LMFAO! Good one! :)

Evo310whp
Evo310whp

Aside from a few games like oblivion,KH etc games have been pretty crappy...for all systems.

Fallout_red
Fallout_red

Oblivion will beat every game other, current and next gen. (Ishaa...)

DevKaz
DevKaz

maybe if those stupid analyst stop on what they are doing, the market wiull improved.

mr_squibble
mr_squibble

This is actually one of the most interesting and well-rounded discussions I have read on a Gamespot news forum. It's nice to read some different perspectives w/o most of the people ripping on each other or touting their "360 owns" or "PS3 will rule all" mantras. I find the whole economical angle very interesting. I have a ton of current and classic hardware and software, and I just flat-out refuse to pay $60 for a game. If it's some rare, older collectible then that's one thing, but for a new (and even great) game like Burnout that will be $20 or less in a year or two, no thank you. I'll wait for the price drop. I maybe buy one or two $50 games each year, and they had better be beyond top-notch titles for the price tag. I'm interested in owning an XBOX 360, but not until a hardware price drop and there are way more great games available in the $20-40 range. I should probably think about getting an HDTV first anway - a TV that I can enjoy for much more than gaming. On the flip side, I am enjoying my portable gaming quite a bit now, and have little trouble dropping $30 for a great PSP or DS game. And, not only is working as a garbageman unappealing, but it's also unionized labor, often leading to some nice wages and benefits.

OPOLO
OPOLO

more people are just renting most games & only buy what they want to add to their collection

DurhamNC
DurhamNC

I'm waiting for the Rev; I buy DS games, but with Marior Kart and Prime out, what's left?

sasuke55
sasuke55

I know I am. I bought Oblivion but I rented Ghost recon. I have too many bills to buy like three games a month. I will just have to rent most of them.

sasuke55
sasuke55

jared81799 you are wrong!!! PS3 and REV don't dictate Start of Next-GEN! If you listened the analyst said that a similar thing happend in 2000! What system came out then? PS2 its just proven that one there arent a bunch of games out for the 360 that are truly next -gen, also there are people who are fans of sony and nintendo. Plus people aren't really buying games for systems they know they won't be playing on in 6 months. unless its like god of war 2 or a Katamari something like that. Get a clue

KiLLer_ba
KiLLer_ba

Well the godfather wasnt going to bring any sales. But for Kingdom Hearts 2 & Oblivion it should broken GT record, it just shows people are renting games then just buying them.

SavoyPrime
SavoyPrime

The analyst seems to downplay the power of Kingdom Hearts II and Oblivion. Both titles were highly anticipated, so I don't see why they can't push the numbers that GT4 did in March 2005.

ocdog45
ocdog45

its not good because people can't afford it. just to show a sample of how the economy is going. I guarantee it won't get any better

spidey008
spidey008

Why did this topic turn into a debate on off-shoring of USA jobs?

thepyrethatburn
thepyrethatburn

Good rebuttal, miner199

It is a complicated topic. I would agree that it is not all bad but it is, at present, an unsustainable model because we are not creating jobs faster. There's also the way that increases the trade deficit because, not only are we almost entirely a service economy but we are now slicing up parts of the service sector as well. The reason that it has slowed down currently is that India currently has hit the limit to what it's infrastructure can handle. That obviously will not last as India retools it's infrastructure to be able to handle the power and other demands that rapid industrialization needs.

However, that is a far bigger topic than what is permissable in the scope of this topic.

In this respect, I'm speaking of buying new games and consoles. The people on the diminishing wage scale cannot afford to buy new consoles for 400-600 or new games for 60. Sure, it can be argued that you will get them cheaper at used places or just waiting a while for the price to drop. However, this affects the game manufacturers because retailers will lower demand for the new games/consoles accordingly.

I picked on Microsoft partially because they are the ones currently with a new console on the market but also because I worked for them a few years back. At one point, they introduced me to my counterpart in India who would be taking my job from me and told me to train him. By refusing, I made myself persona non grata there. That was okay because I left soon afterwards.

As for your children, I would advise them to steer clear of tech. Have them get into a job that cannot be outsourced if possible. (Honestly, if I had it to do all over again, I would not have gotten an accounting degree or a career in tech. I might have become a garbageman instead. It pays very well because noone wants to do it. It can't really be outsourced. Also, until we get some form of way to disintegrate trash into component atoms, it is a job that American society will always have a need for.

Also have your kids learn Chinese. With China closing the gap not just in terms of technology and the military but economically as well, knowing the language may not hurt in the decades to come. Perhaps I am a pessimist but, unless something reverses itself, China is probably going to supplant the US as #1 before I'm dead. (I'm 33 currently so take that as what you will in terms of timeline.)

SamiEloranta
SamiEloranta

This is strange... March saw an awesome line of releases, like Suikoden V, Kingdom Hearts II, MGS3 Subsistence, Metroid Hunters, Tetris DS... maybe the consumers aren't buying because they're too busy playing all these great games that provide tons of quality entertaiment?

DiscGuru101
DiscGuru101

Its all about December 2006 for the average consumer. The used game market is HUGE. It cuts into profits too. 75% of the games I bought for the PS2 were used. Only 'EB' makes money off that. -But those who think the Next Gen isnt out yet usually dont: A) Have a Hi-Def TV B) Have a chance to play XBOX360 on home a entertainment center. XBOX360 (1080i) on a big screen stereo (surround sound) with a glowy green controller wirelessly connected... And 1-step online with a wireless router gives me a super Nex-Gen feeling. Even compared to my high end PC. -Am I gonna buy a Nintendo5? oh hell yeah...

DiscGuru101
DiscGuru101

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

minerl99
minerl99

thepyrethatburn, Interesting comment, but that's a very complicated topic. One thing many people don't consider is that a large percentage of the products in Walmart, Target, Macy's, etc that we think are great bargains are great bargains because of workers overseas doing to the work for less money. Most who don't like the jobs going overseas buy foreign goods and don't even think about it. I remember in 1984 buying Johnston Murphy dress shoes for work. They cost $240. Today the same shoes cost about $90 to $140. It's because of free trade. We lose jobs in America, but in return get lower cost goods for purchase. Cars used to break down constantly. Now they are very solid in comparision, but our manufacturing processes had to improve to make that happen and to stay competitive. I'm not saying free trade is a necessarily a good thing, when American's lose their job overseas or to an H1B visa worker, but it's complicated. We benefit from cheaper goods. If you're the one losing your job, it sucks, but if you don't love your job the incredibly low prices of items at Target and Walmart, Macy's etc. are pretty amazing. I'm not an Economist, but it's not necessarily all bad. My best advice for my kids is to get an education and be willing to change with the times, because foreign labor is going to continue to take jobs. We just need to keep adjusting to create new ones faster.

minerl99
minerl99

Myugenjin, You make some good points regarding the cost of Next Gen gaming. Also, I agree Microsoft's supply chain problems have effected and are still somewhat effecting (although many stores do now have 360's in stock) consumers ability to even purchase a Next Gen system. This hurts overall game sales to some degree, but still the 360 wouldn't be soley responsible. It's likely a combination of industry factors. Quite often I hear the $60 games comment made, but there are many places to find games far below $60. Fry's sells 360 games in the $40 range. www.gamefly.com let's you buy the game you just rented for typically around $45 or so (Oblivion is $46) and they send you the manual & box in mint condition. On the quality of the Xbox 360 titles being poor, I'd have to disagree. The numbers from www.gamerankings.com are pretty convincing. Check out that site, it's not 360 or PS2 fan boys, but a compilation of all game review sites. IGN, 1Up, Gamespot, etc. Many titles have 80 or more reviews that are combined to get the average rating. I'd guess you haven't checked it out for you to make that comment about fan boys. It's a great place to find reviews on all games for all platforms. They post links to all the reviews and total them up. Generally, I spend all my time on Gamespot, IGN and 1Up, but often I find reviews from other sites on that are helpful too. Especially for games I'm really intersted in learning more about.

minerl99
minerl99

UntoldDreams, I agree that things are different after 6 years, but a consensus of game review publications is still a valid comparision. A game rated 90% or 4 out of 5 stars etc, is a solid game no matter what year you compare them. It's a higher standard today with bettter graphics and a much higher expected AI ect, but I think it's fair to say SSX was a high quality game for it's time and deserving of a 90 plus score. No question if SSX came out today it wouldn't score a 90, but for it's day it was excellent.

thepyrethatburn
thepyrethatburn

There is one other issue affecting this and that is the overall issue of the economy. Analysts are noting that, despite a resurgence of the stock market, median wages are not really rising in this country. This is especially true in the tech industry (where a disproportionate number of gamers work as opposed to other industries) where the jobs that aren't shipped off to India have their wages kept low due to the threat of outsourcing.

Using Microsoft as an example, Bill Gates is currently seeking an expansion of H1B visas so more people from India can come to this country, learn a new tech trade, and then leave to go back to their country. When I worked for Microsoft, this helped keep the wages for all us lower-level peons who weren't laid off as low as possible. This may seem good for Microsoft's bottom-line until you take into account that any of us who may've been inclined to buy a 360 do not have the disposible income to do so.

Any decline in video game sales (as well as other entertainment industries) in the past few years are, at least , partially due to the decline in real wages as measured against the rate of inflation. As companies get away with more and more ways to lower the bottom line for the average worker, this has the effect of less disposable income which will be spent towards luxury items such as a video game console or new games. In this respect, Microsoft as well as other industries are slitting their own throats because, by effectively lowering real wages, they are shrinking their own market base. In other words, you can't sell a new console to someone who is more concerned making rent for the month.

Myugenjin
Myugenjin

Minerl99 it may be true that there is a lack of quality in the current PS2/Xbox market to drive sells. But 360 & quality I think are hardly there,... The problem with game rankings is that they aren't official or at least the largest corresponding review by gamers. So obviously if you have alot of 360 fanboy's there, they're reviews will be much higher for the little content that the 360 has. Fortunately for Bethseda theres very little REAL quality on the 360 so when Oblivion or GRAW came out it was a breath of fresh air for virtually all 360 owners! The truth is MS released the 360 at a real bad date with shortages + malfunctions which have many fearing to buy a 360 (which shortens it's game sells) until a much later date. Added with 70% of all games not really being quality titles and a $60 price tag for games, this slow down is expected! Everything in this next gen is costing more making us consumers second guess. Hell 4 pc's you'll need 2-4 gigs of DDR2 ram, a Dual core 64bit CPU, Sata HDD, and SLI to get consistent FPS in Oblivion alone. While on the console side you got $60 games and have to drop at least $700 for an HDTV to get ur eye candies worth out of a 360/PS3!

UntoldDreams
UntoldDreams

It's kind of odd to compare the ps2 to the 360, don't you think? The respective launches are separated by like 6 years of history and 6 years of technology... I mean my PC 6 years ago was crap compared with today...

Jazic
Jazic

I've done my part. And so far only PC game worth playing right now imo is WoW and Oblivion. Only 360 games worth playing are GRAW and Oblivion.

kcarlson1130
kcarlson1130

there was a crazy shortage of 360 's last month. look around now. supplies are crazy up now. if you want a 360 they are totally get able. analist were alittle early on there predictions. this month will crush. dont read to much in to this. note: that doesnt mean the 360 isnt selling. it just means they are finally getting enough to the retailers to keep up.

minerl99
minerl99

Interesting numbers comparing Xbox 360 and PS2 launches. THE PS2 HAS AVERAGED 7-11 GAMES PER YEAR RATED 90% OR HIGHER. DOES THE 360 HAVE ANOTHER 5-9 KILLER GAMES RANKED 90% AND ABOVE BY XMAS TO MATCH THE PS2'S 7-11 YEARLY AVERAGE???? They have 2 so far, Oblivion and GRAW. Here are the rankings from www.gamerankings.com, which compiles game review scores from hundreds of magazines and gaming review sites. The PS2's titles rated 90% or over by year with at least 10 reviews. 2000 - 1 (Oct launch thru Dec) 2001 - 11 2002 - 7 2003 - 11 2004 - 7 2005 - 7 2006 - 1 (in 3 months) Xbox 360 titles 90% or over by year with at least 10 reviews. 2005 - 1 (Nov launch thru Dec) 2006 - 2 (in 3 months) The launches of both systems do seem similar, with one exception. Here is an average score for both systems launch titles. PS2 - 71.2% Average Game Ranking for launch titles 1 Game in the 90's, SSX 7 in the 80's. Xbox 360 Launch - 80.4% Average Game Ranking for launch titles 1 Game in the 90's, Call of Duty 2 10 in the 80's It appears that the launches were similar. Both had one outstanding game. The Xbox 360 had fewer launch titles 21 compared to the PS2's 44, but the 360 had more games ranked in the 80 and above range and overall a significantly higher per game average. 80.4% compared to 71.2%. The PS2 had quantity, the Xbox 360 quality. In subsequent years, the PS2 averaged 7-11 90% or higher games per year. I'd guess Gears of War will rank 90% or above for the 360, but after that I'm not sure. I believe there will be more and certainly 5 or so is possible, I'm just not sure which titles they will be. It would be an interesting bet to make with a friend. Over under on Xbox 360 titles above 90%. Is 7 the over under...? One more thought. With only 1 90's game in the 1st 3 months for the PS2, it may be that the lull created by the lack of quality current generation PS2 or Xbox titles (zero 90 and above for the Xbox this year) could be more of a factor, than the 360 titles in the slow down. The quantity of choices on the 360 could be a bit higher, but the quality is certainly there. At this rate the PS2 would only have 4 titles over 90% for this year. An alltime low, not counting the PS2 launch year. Maybe the PS2 owners are not buying games, while saving their money for a PS3 or comtemplating the decision to purchase a 360.

TooDamnRaw
TooDamnRaw

I don't know why people and all of these "anylists" are blaiming the slump on the next generation of systems, when that's only a portion of the problem. Maybe the problems are the games themselves. Games are getting longer, and harder, and nobody really has to time to play them that much anymore...that's the problem.

Briantb_2008
Briantb_2008

Wait for the Ps3 comes out sales are going to rise.

NeokVash19
NeokVash19

I blame the companies for not making any games worth buying ...come on..seriously ........there have only been a couple of good games these year.....everyone is certainly waiting for the ps3 and revolutio to hit stores....when they arrive ...they will see the difference.....let's just wait until the other consoles come out all right.......then you can talk all you want

gametester1424
gametester1424

One thing that they should have taken into account was the profits of used game resellers such as GameStop and EB. I used to purchase at least 6 games a month, but half of them were used because they weren't worth the $49 price tag. Now that we are supposed to be in the High-Def era, games are costing $59, and while an extra $10 may not seem like much, without a large amount of 360 owners trading in their games to stores like EB, it makes it really hard to want to pony up a full $60 for some of the crap that is being released on the Microsoft's next-gen beast. I would gladly buy Kameo, PGR3, Amped 3, etc... but only used. There have only been 2 games so far, GRAW and Oblivion, that have even seemed worth the next-gen price and judging from what I have seen of game supposedly making the PS3 launch, they don't look worth it either. My gaming budget has shifted from consoles to hand helds as of late, not just for the cheaper games, but for the better quality games, which has never been the case for me in all of my 15 year of gaming.

NeoJedi
NeoJedi

That is not good news... again. The gaming industry needs the 2 other next-gen consoles to climb back up the ladder.

thatguytony
thatguytony

I really hope Johnman05 was being sarcastic about another game industry crash. Doom and gloomers love to talk about the industry going down in flames because sales are lower. Last time I checked games rake in more cash then the film or music industries. Once the PS3 and REV release I have a feeling things will pick back up.

Black_Sage89
Black_Sage89

XBOX 360 Released too soon, it should have waited, everybody is waiting to hear about Playstation 3 and Nintendo Revolution. Microsoft should have known better, they aren't moving consoles and games enough, and I can say without a doubt, once Nintendo and Sony unleash their demons to the world, Microsoft will be, how do I put this...screwed.

cusoker
cusoker

well maybe theres a decline b/c people realize that 90% of the stuff being put out is crap... obvious exclusions are Oblivion and KH: 2, both being not crap

dz99ls
dz99ls

TintedChimes "maybe if games were cheaper, like all current gen console games be 29.99 and all next gen be 49.99 then the masses will bite. " Posted Apr 10, 2006 7:06 pm PT The problem here is that we all pay the $60 per title if we would all and by all i mean EVERYONE stops buying games at the $60 tag then the prices of next gen games will come down. if you want a game then rent it they will soon see the mistake for charging so much

TintedChimes
TintedChimes

maybe if games were cheaper, like all current gen console games be 29.99 and all next gen be 49.99 then the masses will bite.

Sagacious_Tien
Sagacious_Tien

Just goes to show that people are still waiting on making that leap to an Xbox360. I say, do it!

mariokart64fan
mariokart64fan

revolution will jump sales by 10x that of 360 and 2 x that of ps3 respectivly bc price and exclusive mature titles like red steel and another title from free radical /ubisoft

johnman05
johnman05

here comes another crash for the industry...jus like in the early 80's