NPD May 2013 - console and handheld software sales lowest since May 2000

Source

Coming off E3, the industry has a sense of optimism, looking forward to new consoles, new games and new technologies. The reality of today, however, is that retail sales are dreadful. NPD's May 2013 report shows an overall drop of 25 percent, as sales fell to $386.3 million, while software got hammered, dropping 44 percent to $187.6 million and hardware fell 31 percent to $96 million. Accessories also fell six percent to $115.3 million.

Liam Callahan, NPD analyst, explained, "Overall entertainment software declines, down forty-four percent, were driven partly by sharp year-over-year declines within PC games due to poor comparisons to last year's Diablo 3 release."

"Softness in new physical entertainment software sales stemmed from a decline in the number of new launches, with over 30 percent fewer new SKUs, as well as poor performance of the new SKUs that were released. New SKUs generated over seventy percent less units on a per-SKU basis, and a decrease of over eighty percent revenue per SKU," he continued. "Overall new launch performance in May'13 was poor, down 84 percent in units, decreasing 88 percent in dollars, which was driven by PCs and Consoles as new launches for portables were up 5 percent in units, and down only 7 percent in dollars."

"In May 2013, the top 10 games represented a lower percentage of sales compared to games from the previous few Mays at 18 percent of overall unit sales and 25 percent of overall dollars, compared to 30 percent of units and 45 percent of dollars in May 2012. This is contrary to trends we've been seeing over the last few years with the top ten games generating a larger percentage of overall sales and may be indicative of the weak new launch performance this May."

Wedbush analyst Michael Pachter noted on Twitter that this May's software numbers were actually the lowest for handhelds and consoles since May 2000. The industry clearly needs to do something to drive software sales back up. Publishers are hoping that Xbox One and PS4 are at least part of the solution this holiday.

The hardware side of the industry didn't fare much better than software. While NPD doesn't give us units data anymore, the firm noted that 3DS, which saw sales flat year-over-year with May 2012, represented the best performance. "Nintendo's 3DS edged out the 360 as the top selling platform across hardware and portables. However, the 360 was the top selling console hardware platform this month for the twenty-ninth consecutive month," Callahan said. [Update: Microsoft has now said that Xbox 360 sold another 114,000 units in the US in May.]

GamesIndustry

Seems like the PS4 and X1 can't arrive soon enough...

Seems like the PS4 and X1 can't arrive soon enough...

Vari3ty

Assuming that the new consoles will somehow spark a resurgence in games.  The problem for me is that the longer I play games, the more I feel, "been there, done that."  New consoles alone aren't going the save the gaming industry.  The games themselves need to be better and more interesting.  Otherwise, sales are going to nosedive after the wow factor wears off.

[QUOTE="Vari3ty"]

Seems like the PS4 and X1 can't arrive soon enough...

capaho

Assuming that the new consoles will somehow spark a resurgence in games.  The problem for me is that the longer I play games, the more I feel, "been there, done that."  New consoles alone aren't going the save the gaming industry.  The games themselves need to be better and more interesting.  Otherwise, sales are going to nosedive after the wow factor wears off.

True, I think then the question really becomes "now what?" if these next gen consoles can't drag the industry out of the hole it's in. Where does the industry go if console gaming no longer exists (at least in its current state)? I think a lot of us have been assuming that the Wii U is a flop because of Nintendo's direction with the console - namely poor marketing and weaker hardware - which is true to an extent, but it might also be due to other factors which will affect the PS4 and X1 as well. If the PS4 and X1 perform as well as the Wii U currently is, next gen is going to be a bloodbath. 

I was just thinking today how gaming feels more and more like what you said - a "been there, done that". Even at this E3 the most impressive titles still felt like things I've seen before, but just with a shinier coat of polish and technical fidelity on them. 

Something does have to change to solve these problems. Unfortunately I don't know the solutions.

True, I think then the question really becomes "now what?" if these next gen consoles can't drag the industry out of the hole it's in. Where does the industry go if console gaming no longer exists (at least in its current state)? I think a lot of us have been assuming that the Wii U is a flop because of Nintendo's direction with the console - namely poor marketing and weaker hardware - which is true to an extent, but it might also be due to other factors which will affect the PS4 and X1 as well. If the PS4 and X1 perform as well as the Wii U currently is, next gen is going to be a bloodbath. 

I was just thinking today how gaming feels more and more like what you said - a "been there, done that". Even at this E3 the most impressive titles still felt like things I've seen before, but just with a shinier coat of polish and technical fidelity on them. 

Something does have to change to solve these problems. Unfortunately I don't know the solutions.

Vari3ty

One of the reasons the Wii U doesn't appeal to me is the lack of interesting games.  Two of the games from your top 10 list were Donkey Kong and another Mario spinoff, games I would never buy.  Nintendo's franchise games just don't appeal to me and they keep cranking them out like Big Macs.  That's the Wii U's biggest problem.

Having just finished Last of Us, there is nothing been there done that with the best games. People like shiny new stuff, the new consoles are needed to generate excitement again.dvader654

The problem with that, though, is that really good games are few and far between.  There are too many mediocre games and sequels that just don't sustain a level of interest or excitement sufficient to motivate me to want to finish the game.  I frequently end up switching to a different game before I finish the previous one because I lost interest in it before I finished it.

The idea of a ten year cycle may turn out to be the only dumber thing than making an online only, DRM-laden, $500 console.

Although I would wager the two are at parity when it will come to the retail devastation they cause.

The idea of a ten year cycle may turn out to be the only dumber thing than making an online only, DRM-laden, $500 console.

Although I would wager the two are at parity when it will come to the retail devastation they cause.

Shame-usBlackley

Retail is going the way of the dodo just like it did for music, movies and PC games. Console gaming is bound to follow sooner or later. These NPD reports are just going to grow increasingly irrelevant.

Retail is going the way of the dodo just like it did for music, movies and PC games. Console gaming is bound to follow sooner or later. These NPD reports are just going to grow increasingly irrelevant.

UpInFlames

I believe the days of physical media are numbered, all games will eventually be DD, but that won't stop NPD from tracking game sales.  The ultimate problem for the gaming industry is game quality.  Hopefully, once the physical media is gone, they will put at least some of that cost savings into game development.  I doubt that the demise of physical media will mean the demise of $60 games.

[QUOTE="Shame-usBlackley"]

The idea of a ten year cycle may turn out to be the only dumber thing than making an online only, DRM-laden, $500 console.

Although I would wager the two are at parity when it will come to the retail devastation they cause.

UpInFlames

Retail is going the way of the dodo just like it did for music, movies and PC games. Console gaming is bound to follow sooner or later. These NPD reports are just going to grow increasingly irrelevant.

With sales like this, the industry is going to go the way of the dodo as well. I don't think there is any way to argue that with hardware sales like this, there is a big problem with how this particular generation has been handled. Microsoft sold nearly half the systems they did a year ago. Now, if people want to blindly believe that digital purchases not being counted are hiding an otherwise healthy, thriving industry, then I think they are fooling themselves. For starters, only HALF of the consoles are connected to the internet to buy digital copies of software. Let's look at a very simplified example of the digital model. If Game X sells 100,000 hard copies of a game, then it would stand to reason that Game X, sold digitally at the exact same price, would sell half of that in a best case scenario, hardly a game changer. That's under the most ideal of circumstances. I don't think digital sales are anywhere near as rosy as they would like to believe.

In summary, if digital sales are some hidden giant that deviates from retail trends greatly, they certainly aren't manifesting their presence in the way of hardware sales, which are dropping precipitously, not going up.

What a disaster. MS and Sony are killing this industry with their high priced consoles opting for profit over affordability. Theyre also to be blamed for delaying this next gen by 2 years. MS shouldve come out with a next gen console by November 2011. PS4 shouldve been out last year. The core audience is hungry for new consoles and they are not getting anything.

I suppose gamers also deserve some blame for this delay. After all I remember getting into arguments with people on this very board who did not want new consoles in 2011 or even 2012. They were satisfied playing current gen games and apparently did not think the games/graphics could get better. When your core audience doesnt challenge you, the companies get complacent. Just look at Nintendo.

Sad state of affairs for this industry.

What a disaster. MS and Sony are killing this industry with their high priced consoles opting for profit over affordability. Theyre also to be blamed for delaying this next gen by 2 years. MS shouldve come out with a next gen console by November 2011. PS4 shouldve been out last year. The core audience is hungry for new consoles and they are not getting anything.

 

I suppose gamers also deserve some blame for this delay. After all I remember getting into arguments with people on this very board who did not want new consoles in 2011 or even 2012. They were satisfied playing current gen games and apparently did not think the games/graphics could get better. When your core audience doesnt challenge you, the companies get complacent. Just look at Nintendo.

 

Sad state of affairs for this industry.

S0lidSnake

With sales like this, the industry is going to go the way of the dodo as well. I don't think there is any way to argue that with hardware sales like this, there is a big problem with how this particular generation has been handled. Microsoft sold nearly half the systems they did a year ago. Now, if people want to blindly believe that digital purchases not being counted are hiding an otherwise healthy, thriving industry, then I think they are fooling themselves. For starters, only HALF of the consoles are connected to the internet to buy digital copies of software. Let's look at a very simplified example of the digital model. If Game X sells 100,000 hard copies of a game, then it would stand to reason that Game X, sold digitally at the exact same price, would sell half of that in a best case scenario, hardly a game changer. That's under the most ideal of circumstances. I don't think digital sales are anywhere near as rosy as they would like to believe.

In summary, if digital sales are some hidden giant that deviates from retail trends greatly, they certainly aren't manifesting their presence in the way of hardware sales, which are dropping precipitously, not going up.

Shame-usBlackley

Oh, I'm not trying to make any kind of hidden point. I don't think digital sales on consoles are anything to write home about as the console manufacturers and game creators simply aren't creating any incentive to buy digital.

Hardware sales are slow because both Microsoft and Sony would simply rather see higher profits on each console sold than higher sales. As for the software, I think console gaming is in a state of creative slump and I doubt that new hardware will do much to resolve that. But we'll see.

I suppose gamers also deserve some blame for this delay. After all I remember getting into arguments with people on this very board who did not want new consoles in 2011 or even 2012. They were satisfied playing current gen games and apparently did not think the games/graphics could get better. When your core audience doesnt challenge you, the companies get complacent. Just look at Nintendo.

 S0lidSnake

I don't think the onus is on us to challenge these companies. They are the ones peddling their "pots n' pans" and the only involvement we have is whether or not we are going to buying what they are selling. They have to bring the goods and the creativity to the table or else the market will find it elsewhere.

I think Sony and MS has hit most of the demographic that can afford their machine nowadays and the only next step would be to implement a price drop but they seem hell-bent on maintaining the status quo so it looks to me they aren't going to go for the quantity numbers. I think it might have something to do with wanting to actually phase out their current platforms because the X1 and the PS4 are just around the corner with their release and want to keep the pricing gap smaller so they can justify the new generation's console release price even more.

I'm really actually scratching my head on this one since it seems that these numbers are pretty telling of how everything is fairing so far. Poorly.

I sure that the reduce sales are not cause by one factor.

I do not thing that digital is a large as many make it out to be. (Also a pure DD marcket would be the worse thing to happen to the gaming for the consumers.)

New System are coming out and I am sure many are try to save up the 400+ to get them.

Also, gamers are give AA(A) deveoplers no room when it comes to the game. A FPS can come up with new level design and well done staging and there are many gamers that will attack for being just another FPS while prasing a low end up for looking nice.

[QUOTE="Shame-usBlackley"]

The idea of a ten year cycle may turn out to be the only dumber thing than making an online only, DRM-laden, $500 console.

Although I would wager the two are at parity when it will come to the retail devastation they cause.

UpInFlames

Retail is going the way of the dodo just like it did for music, movies and PC games. Console gaming is bound to follow sooner or later. These NPD reports are just going to grow increasingly irrelevant.

On a related note, Gamasutra has decided that since the NPD omits digital (an ever growing chunk of sales) its not worth covering.

http://www.gamasutra.com/view/news/194487/Why_Gamasutra_is_skipping_monthly_NPD_reports.php

Many of our readers know that the NPD's monthly public reports focus primarily on U.S. physical retail, and headlines often say how the game industry is in decline, when in fact it's new physical game retail in the U.S. that's declining, not the industry as a whole. The NPDs, as you may understand, do not paint a 100 percent accurate picture of the health of the game industry today.

@Shaemus - A ten year cycle is fine (worked for the PS1 and the PS2) bearing in mind that a ten year cycle didn't/doesn't mean not rolling out new hardware wtihin the timeframe, it means not cutting off old hardware just because new hardware is on the shelves.

The Wii U sold under 40k.

Nintendo needs to either do something fast or take this system out behind the barn and put it down.

[QUOTE="S0lidSnake"]

I suppose gamers also deserve some blame for this delay. After all I remember getting into arguments with people on this very board who did not want new consoles in 2011 or even 2012. They were satisfied playing current gen games and apparently did not think the games/graphics could get better. When your core audience doesnt challenge you, the companies get complacent. Just look at Nintendo.

juradai

I don't think the onus is on us to challenge these companies. They are the ones peddling their "pots n' pans" and the only involvement we have is whether or not we are going to buying what they are selling. They have to bring the goods and the creativity to the table or else the market will find it elsewhere.

I think Sony and MS has hit most of the demographic that can afford their machine nowadays and the only next step would be to implement a price drop but they seem hell-bent on maintaining the status quo so it looks to me they aren't going to go for the quantity numbers. I think it might have something to do with wanting to actually phase out their current platforms because the X1 and the PS4 are just around the corner with their release and want to keep the pricing gap smaller so they can justify the new generation's console release price even more.

I'm really actually scratching my head on this one since it seems that these numbers are pretty telling of how everything is fairing so far. Poorly.

I agree. I think the big hardware problem is the relunctance of hardware companies to chop prices. Sony is kind of saddled with higher priced hardware this gen, so a war of pricecuts wasn't one they were going to win so its unsurprising that they haven't sought such a war, but I'm a bit surprised that MS wasn't more aggressive about pricecuts. If they had chopped prices as aggressively as Sony did they would have sold a lot more HW vi a vi the competition and forced Sony to either match them (and take deep losses) or not match them (and forfeit the competition, as Nintendo forced Sony to do with the Vita when they radically chopped the price of the 3DS in a way that Sony was unwilling to match). Its crazy that the PS1 and PS2 started off at lower prices and saw faster, deeper cuts.

[QUOTE="S0lidSnake"]

What a disaster. MS and Sony are killing this industry with their high priced consoles opting for profit over affordability. Theyre also to be blamed for delaying this next gen by 2 years. MS shouldve come out with a next gen console by November 2011. PS4 shouldve been out last year. The core audience is hungry for new consoles and they are not getting anything.

I suppose gamers also deserve some blame for this delay. After all I remember getting into arguments with people on this very board who did not want new consoles in 2011 or even 2012. They were satisfied playing current gen games and apparently did not think the games/graphics could get better. When your core audience doesnt challenge you, the companies get complacent. Just look at Nintendo.

Sad state of affairs for this industry.

Pedro

I think its makers of mid-tier games that have a problem. The mega games are doing better than ever, indie games are doing extremely well and DLC (often multiplayer oriented) is thriving.

Bear in mind, I'm not arguing that in absolute terms spending isn't declining. A guy who buys a CoD map pack for $15 rather than a CoD knock off for $60 is spending 75% less money than he otherwise would of, and people who bought say, Guacamelee over Castlevania Mirror of Fate got a better game for substantially less money ($15 vs $40).

I think a lot of publishers of midtier games are overspending in a futile attempt to make their games massive hits. Its crazy that solid franchises like Max Payne, Resident Evil, Tomb Raider and Dead Space managed to commercially disappoint despite putting up what in a sane world would be considered good numbers because their publishers/developers have decided 'We wanna be big, so we aren't going to waste our time on anything that sells less than 5 million copies, and yes, we will bloat the budget of our mid-tier games so that if they don't put up massive numbers, we will lose money!'.

Its analogous to putting a gun to your head and telling random strangers that unless they give you money you will blow your head off. That will distress people who care about you (existing fans of the franchise) but it won't impress non-fans.

Also, there's the fact that some developers of mid-tier games make design changes which alienate existing fans in an attempt to lure non-fans (which works so rarely its like hoping to pay your mortgage by buying lotto tickets).

Given that the worldwide economy is not very healthy. Plus this has been the longest console generation in history. The 7th Generation of videogame machines has been going on since 2004. With Nintendo DS and Sony PSP launched, followed by 2005 debut of Xbox 360. Now it is 2013. The DS is still on sale with a few new DS releases in 2013. Even the PSP has 2 new UMD game releases in Japan and Asia region. Plus a few new downloadable PSP games, minis etc. The Xbox 360 is not on it's third hardware revision. Xbox 360 "superslim" which is to make it look like the upcoming Xbox One. Even the Nintendo Wii has 4 2013 new game releases and still on sale. The Wii Mini.

The 7th Generation of Game consoles and handhelds have become somewhat "Stale" Which also contributes to lower sales of Videogame Consoles/Handhelds and software for both. Since everyone who wants a Xbox 360, Playstation 3, Nintendo Wii, Nintendo DS, Sony PSP has one by now. So sales are going to be very low.

On a related note, Gamasutra has decided that since the NPD omits digital (an ever growing chunk of sales) its not worth covering.

http://www.gamasutra.com/view/news/194487/Why_Gamasutra_is_skipping_monthly_NPD_reports.php

Many of our readers know that the NPD's monthly public reports focus primarily on U.S. physical retail, and headlines often say how the game industry is in decline, when in fact it's new physical game retail in the U.S. that's declining, not the industry as a whole. The NPDs, as you may understand, do not paint a 100 percent accurate picture of the health of the game industry today.

@Shaemus - A ten year cycle is fine (worked for the PS1 and the PS2) bearing in mind that a ten year cycle didn't/doesn't mean not rolling out new hardware wtihin the timeframe, it means not cutting off old hardware just because new hardware is on the shelves.

CarnageHeart

Good article. NPD simply needs to evolve to remain relevant. They've been completely irrelevant when it comes to the PC market for years now, but next-gen that's going to change for the console market as well. It must be frutrating for NPD, the numbers they're peddling are on the way out and digital retailers such as Steam are hell-bent on not releasing any kind of data. Hopefully, the industry will come to some kind of an agreement to keep us in the loop. Realistically, I'm not counting on it. Everything I've seen leads me to believe that publishers simply don't have any kind of vested interest in making sales data public.