NPD: November game sales down 18 percent
Holiday season even worse than expected; 326,000 360s sold in first four days on market.
Last week, NPD released its November 2005 sales numbers for the game industry. Much to publishers' and stockholders' relief, the industry research group reported a 3 percent year-on-year drop, far below analysts' estimates. Unfortunately, the elation was short-lived, as NPD retracted the numbers just hours later due to "overstated information" from a smaller-than-normal survey sample.
Today, it became clear exactly how overstated the NPD report was. The company rereleased figures that showed a staggering 18 percent year-on-year drop in November game sales, despite an average game-price increase of 2 percent. The falloff was steeper than what the majority of analysts had feared, with the most dire estimates maxing out at around 16 percent.
During the four weeks from October 30 to November 26, only $696 million worth of game software was sold, way down from $849 million during the same period in 2004. The lack of blockbusters like Grand Theft Auto: San Andreas, Half-Life 2, and Metal Gear Solid 3 were also cited as a factor by analysts. "[The fall was] due to a tough comp[arison] against Halo 2 last year and a slowdown in sales ahead of the Xbox 360 launch," said UBS analyst Michael P. Wallace.
Speaking of the Xbox 360, the new NPD numbers showed that Microsoft sold only 326,000 units of the next-gen console during its first five days on the market. By contrast, the original Xbox sold more than 550,000 units in its first week of release in 2001. Sony's PSP, which launched in the US and Canada on March 24 of this year, sold around 602,000 units during its first seven days in stores. A consensus of analysts blamed the low figure on "limited quantities of Xbox 360 hardware," as Thomas Weisel Partners' Colin Sebastian politely put it.
As far as Xbox 360 software was concerned, Call of Duty 2 was the top title, with a whopping 77 percent attach rate. In layman's terms, that means more than three out of every four people who bought Microsoft's next-gen console picked up Activision's shooter, often because of bundling. Call of Duty 2 was given the most credit for Activision's 54 percent spike in sales, which came in spite of lackluster numbers for two of its highest-profile fall releases. FBR's Shawn Mile called Gun's 225,000-unit debut "decent," but termed True Crime New York City's paltry 73,000 in sales "disappointing."
The second- and third-best-selling Xbox 360 games were Electronic Arts' Madden NFL 2006 and Need for Speed Most Wanted. Ironically, the multiplatform Most Wanted sold 34 percent less units than its predecessor, Need for Speed Underground 2, suggesting EA's cash-cow franchise may finally be drying up. That said, sales of Madden, NBA Live 06, and Harry Potter more than made up for the drop, boosting the company's overall bottom line by 8 percent for November.
EA's modest gains compared very favorably to its rivals' steep losses. Though its year-to-date sales are up 11.9 percent, THQ saw a 32 percent slide during November, thanks to a lack of a Pixar film tie-in games like last year's Incredibles. THQ's latest wrestling game, WWE Smackdown vs. Raw 2006, saw strong sales, though it sold 41 percent less units than its 2004 predecessor during the month due to differing ship dates. Take-Two Interactive saw the worst annual decline, some 63 percent, a figure which Milne said may still be too optimistic. However, the decrease was more to do with the fact the company released the second-highest-grossing game of all time, Grand Theft Auto: San Andreas, on October 27, 2004.
Another factor in the November numbers was falling sales of current-generation hardware. As might be expected with the 360 going on sale, the Xbox saw the biggest decline, some 75 percent. Far behind it was the new slim-line PlayStation 2 at 21 percent, with the GameCube falling off just 19 percent.
- GameSpot Score5.3mediocre
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