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May sales rebound led by Red Dead Redemption - Analyst

Wedbush's Michael Pachter points to strong debut of Rockstar's Western, decent starts of Super Mario Galaxy 2, Alan Wake for expected 11 percent software growth last month.

April arrived like a punch in the stomach to analysts and gaming executives who have been holding their breath to see a turnaround in US software sales at retail. Defying even some of the most pessimistic expectations, industry game sales were down 22 percent during the month, a figure that bloated to a 26 percent decline after factoring in hardware and accessories.

The hope of May doesn't quite ride alone.

The hope of May doesn't quite ride alone.

With Wedbush analyst Michael Pachter speculating that "something is terribly wrong" despite prime selling conditions in April, the industry watcher has returned to offer an optimistic outlook on May's figures. According to the analyst, May software sales should come in at $500 million for the month, up 11 percent from the same period in 2009. While that tally is respectable, Pachter believes that May sales should have been stronger, given the release slate.

"While the lineup provided something for everybody, with one Xbox 360 exclusive, one Wii exclusive, two hardcore shooters, two adventure games, one racing game, two action sports game, and three movie licenses, it appears that several of these titles performed well below expectations," he said.

"Red Dead Redemption was a breakout hit, but Alan Wake was launched the same day (and suffered as a result), the Prince of Persia film did not provide the expected boost for the video game, Blur had a very weak launch, and Super Mario Galaxy 2 sold at only a mediocre level (for a Nintendo title)."

And whereas Pachter was previously baffled by April's sales declines, he now believes that one likely reason gamers aren't showing up to retail is the strong--and largely unmonetized--online element of many hit titles.

"We believe that the publishers and developers of games have created more robust multiplayer content in recent years that has resulted in core gamers playing the same games for much longer, on average, than they did in the past, leading to lower sales of new games," he wrote. "We expect the publishers to monetize the value created by online play, led by Activision."

"We anticipate that Activision will find a way to monetize the 1.75 billion hours of Call of Duty Modern Warfare 2 online play on the Xbox 360 in the first five months following the game's release," he continued. "This game play suggests that as many as 12-13 million gamers (PS3 and Xbox 360 combined) played online for an AVERAGE of 10 hours per week for the five months since the game's launch. It is obvious to us, and likely equally obvious to Activision, that these gamers are spending a lot of time that was monetized only through the original purchase." [Emphasis in original.]

As for the performance of individual titles in May, Pachter believes Rockstar's Red Dead Redemption led US sales with 1.8 million units sold across the Xbox 360 and PS3. Take-Two has previously noted that the game sold 5 million units worldwide in less than a month of its May 18 release. Other top sellers, according to Pachter, were Super Mario Galaxy 2 (650,000 units) and UFC Undisputed 2010 (700,000 units), the latter of which came in below THQ's expectations. Xbox 360-exclusive Alan Wake also was named as a top performer, though Pachter did not offer a sales estimate.

On the hardware front, Pachter believes all three consoles saw sales growth during the period. He estimated Wii sales of 330,000 units (up 14 percent), Xbox 360 sales of 190,000 units (up 9 percent), and PS3 sales of 175,000 (up 34 percent). However, DS sales are expected to fall 29 percent to 450,000 units, while PSP units drop 35 percent to just 65,000.

The NPD Group is expected to release its May recap this Thursday, having delayed the report three weeks due to a switch in its internal systems.

98 Comments

  • entong

    Posted Aug 21, 2010 8:40 am GMT

    low game sales? BLAME IT ON GAMESTOP... : )

  • fLaMbOaStiN

    Posted Jul 12, 2010 12:45 pm GMT

    Oh yeah i'd thought i'd mention Alan Wake is a AWSOME game but as someone said earlie it's about 12-15hours (not 8hrs like you said lol) long.. I think that earns a rental from most gamers.. The time you can package a 10hour game and let it loose on unsuspecting buyers while expecting awsome sales is over.. We have gamefly now!

  • fLaMbOaStiN

    Posted Jul 12, 2010 12:42 pm GMT

    I think he's right about games not saleing as well as they used to because of robust online being offered in other games.. I know ever since i started getting into MMO's starting that i haven't even really bought ANY console games compared to the 36 games i bought the year previously just for my xbox alone... Now when i want a game i'll go rent it, just because i know i'll prolly only play it for a little bit each day until i eventually beat it, then go back to playing my MMO..

    I understand a lot of people don't play MMO's, but i think they can relate to what im saying because like the anaylist said they are prolly spending most their time still playing Call Of Duty: MW 1&2, or Battle Field:BC2.. With that said i also think it's pretty messed up that Activision and eventually other gameing companies are gonna find some way to squeeze any $$ they can now outa online play.. I already think $60 is outrageous enough for a video game (reason why i dont buy them anymore i usually rent them) but now it's gonna prolly be another $10 per month for online, $5 per multiple ending in the game, and 500ms points per unlockable online character or something like that lol..

    Maybe they havnt realized that this economy is also takeing part in these slumping sales; and that adding more fee's to their video games is prolly the wrong thing to do right now..

  • gbrading Site moderator

    Posted Jul 7, 2010 8:01 am GMT

    Analysts postulating on possible future sales... Forgive me if I don't believe everything.

  • taisui

    Posted Jul 1, 2010 7:06 pm GMT

    Pachter got served again by the latest NPD, epic fail.

  • mf1986

    Posted Jul 1, 2010 9:29 am GMT

    I think he is right about ppl playing online and not buying more games. my mates play multiplayer FPS all the time and they only play the same brand from a year to other. But I always prefer a good Single player game.

  • bogeta24

    Posted Jun 30, 2010 6:21 pm GMT

    oh, wrong page haha

  • awmace5

    Posted Jun 30, 2010 4:34 pm GMT

    RED DEAD REDEMPTION IS AWESOME

  • IrishBulldog93

    Posted Jun 30, 2010 7:04 am GMT

    Pachter . . . . . just shut up !!

  • grasshopper6

    Posted Jun 29, 2010 11:50 pm GMT

    Red Dead Redemption is awesome I love that game

  • wondernova

    Posted Jun 29, 2010 9:03 pm GMT

    @bogeta24

    what has that got to do with Wedbush's Michael Pachter comments on game sales?!

  • bogeta24

    Posted Jun 29, 2010 8:07 pm GMT

    new xbox 360 = waste of money, still has that crappy ass hd problem

  • wwlettsome

    Posted Jun 29, 2010 6:04 pm GMT

    Pachter continues to show that he's basically clueless about the gaming business. After freaking out over April sales (instead of paying attention the release schedule) he now returns to declare victory in May. He has now figured out that players actually play stuff...wait for it...ONLINE! For his next amazing feat he will declare that gamers sometimes...wait for it...like to buy good games! And that gamers in general...wait for it...don't like to pay sixty bucks for a 8 hour game (looking at you a little bit there Mr. Wake).

    I love that this guy actually gets paid for such quality work.

  • snaggleoooo

    Posted Jun 29, 2010 5:39 pm GMT

    I'd love to see shooters start charging for online play. Noone would buy it. If we want to pay to play with other people online, we get an MMO. Start charging for shooters and it'll destroy the genre.

  • fatalgamer007

    Posted Jun 29, 2010 3:53 pm GMT

    Yeah, Pachter, the problem is the economy and the fact that so many people are have trouble finding jobs. Less money = less game purchases. SIMPLE.

    That Toxonomic guy gets it.

  • brendanhunt1

    Posted Jun 29, 2010 1:25 pm GMT

    Analyst predict analyst unemployment

  • Dynamo11

    Posted Jun 29, 2010 12:52 pm GMT

    Red Dead Redemption needs SP DLC not MP.... imagine playing Morrowind online! Exactly it just doesn't work

  • sophospeare

    Posted Jun 29, 2010 12:12 pm GMT

    @ taxonomic

    Couldn't agree more on the "suits" opinions. They are trying to analyze this business like you'd analyze a commodity. They seem to think that a year by year comparison is an accurate indicator of what sales will be like during the current year. But to echo wahyudil, sales are driven by mainly one thing...good games. If the games don't appeal to us, we don't buy them, plain and simple. Sure, the economy has some impact, if you have less money, you buy fewer games, but overall (with a few notable exceptions), if you make a good game and price it right, it'll sell big.

    And to suggest that a subscription model or something along those lines will happen is ridiculous. I wouldn't put it past Bobby Kotick to try it, but my thought is that that will be the line gamers won't cross. More likely, you'll see stupid microtransactions to get some gun, armor, magic hat, etc. that'll give you an advantage over someone else. And if a developer tries that, I will not be playing that game either. Cosmetic changes...fine, anything else...not so fine. If I want any of that crap, I'll play an MMO.

  • tenaus

    Posted Jun 29, 2010 11:28 am GMT

    Seems perfectly reasonable to me, I don't see why people think the analyst is a complete moron.

  • madden75

    Posted Jun 29, 2010 10:35 am GMT

    This guy is a complete moron, honestly, anyone who believes that movie tie in games will sell well, or provide a big boost to sales, is. Games don't sell well because they're rehashes, roster updates, gimmicks, or just plain not worth $60. When publishers get back to putting out games that gamers WANT to play, then perhaps sales will go up.

  • wahyudil

    Posted Jun 29, 2010 10:17 am GMT

    like iwata said, blame the game not the console

  • taxonomic

    Posted Jun 29, 2010 9:57 am GMT

    the big company suits like Pachter just don't get it. None of them do. They aren't working a regular job and trying to support a family and/or a home on a weekly wage. They think if sales are down then it must be some strange abhorrent anomaly that is to blame. They just can't see the plain truth: That if nothing good comes out that month, people aren't buying.

    Just wait till this October. They'll probably cry that September sales are low, and then act like they did something magical to turn it around in October when New Vegas, Dead Rising 2, Medal of Honor, Fear 3, Fable 3 and Force Unleashed 2 all come out.

    Here's how you solve your sales problem Pachter: Space these games out further. When publishers crowd them all in together gamers usually pick one or two and buy the rest when they hit the used bin. That's why you see dips in sales. I worked in that business, I know how stupid corporate can be when it comes to sales figures. All of them are privileged idiots who obtained their MBA's on the back of a box of crackerjacks.

  • andreperezpalha

    Posted Jun 29, 2010 8:02 am GMT

    Miss the time when I could buy Chrono Trigger and play for months, finding all endings...

  • andreperezpalha

    Posted Jun 29, 2010 8:01 am GMT

    The industry is to focused on online playing, which we, x360 owners already pay, and the single campaigns are getting smaller. For me, if we had a mix of good campaign history, with a decent amount of playtime, and a decent multiplayer, the game is a must buy, like Red Dead Redemption. But, with a 5 hours campaign and forthcoming dlc's, being a gamer become very expensive...

  • PixelAddict

    Posted Jun 29, 2010 7:35 am GMT

    Pachter is a fool.

  • drokmore

    Posted Jun 29, 2010 7:00 am GMT

    With the cost of a game at 60$ for my xbox, I dont see how you can fully compare month to month. Youll see spikes in months with high quality games that I actually will put money on. Otherwise its the second hand market for me.

  • Goriza

    Posted Jun 29, 2010 6:50 am GMT

    Alan Wake is a great game and every gamer should play, if you haven't played you are missing a big game.

  • Rottenwood

    Posted Jun 29, 2010 6:28 am GMT

    @Dualmask

    Sales seem to agree with you, but I think Galaxy 2 strikes a nice balance by having a lot of 2D levels mixed in with the 3D stuff. And the original Galaxy has moved about ten million units and counting, so the audience is clearly there, too. 2D Mario is a wonderful, wonderful thing - it's a major reason why this massive industry exists - but if it's all there is, I think the novelty/nostalgia factor ends pretty quickly and the franchise dries up.

    That said, running the two franchises concurrently would be great. Miyamoto does the 3D Mario titles and Hayashi does the 2D. One for summer, one for Christmas, and Nintendo gets a new fleet of golden hovercrafts fueled by cocaine.

  • kvan33

    Posted Jun 29, 2010 6:21 am GMT

    RDR feels fresh compared to a lot of other games coming out. It's quality, and that's why it's selling. I think the gaming public is starting to pay more attention to reviews and it shows.

  • snake3rules

    Posted Jun 29, 2010 6:19 am GMT

    meanwhile, take twos shares have gone down like 30 percent since its release, the majority of which occurred right AFTER the company held a quarterly conference and announced better than expected sales, and improved future guidance ... so natch, the stock would drop like a stone in the water, meanwhile in the same period EA and activision have gone up ... the stock market is sham that will eventually lead to the downfall of our nation .... a system with this much of our nations currency tied up in it, and based soley on public opinion as opposed to factual gains or losses, its a wonder we made it this long before without a lone person like madoff destabilizing the entire nations economy.

  • Dualmask

    Posted Jun 29, 2010 6:12 am GMT

    People prefer 2D Mario to 3D Mario. Sooner or later Nintendo will get the hint.

  • evilgamer22

    Posted Jun 29, 2010 6:02 am GMT

    @tbs76
    I agree, the last couple of years it seems like when one big game comes 4 more come out in the same week. Its really hard to keep up with everything thats coming out both for money and time reasons. I still haven't even gotten around to playing GOW3 yet and that came out in March. However, I do agree with the article in that online play is increasing the longevity of some games as well as dlc, like when Bioware dropped the Awakening expansion for DA which caused me to put some newer games on hold.

  • Rottenwood

    Posted Jun 29, 2010 5:35 am GMT

    @Morphine_OD

    No good games on any Nintendo platform? A bit of an exaggeration, no? 50% of the highest-rated games of all time at GameRankings.com are Nintendo products; three of them are on the Wii. (Galaxy 1 and 2 and Twilight Princess.) That alone justifies a Wii purchase for any serious gamer.

    So far this year, the Wii has had Galaxy 2, No More Heroes 2, Monster Hunter Tri, Sin and Punishment, and Ultimate All-Stars. Hell, even the Silent Hill and Red Steel games were way better than anyone could've expected, and Sakura Wars came out of nowhere to try to help fill the Wii's gaping RPG void. Pretty strong line-up with a Game of the Year at the head of the pack.

    Of course, the DS has been awful, so you win some, lose some...

  • ParisSun

    Posted Jun 29, 2010 5:24 am GMT

    Alan Wake was a fine game but should have been better. RDR is an excellent game. It's definitely the best western game I've ever played and I like it better than all the GTA games. So far it is definitely the GOTY in my book.

  • Morphine_OD

    Posted Jun 29, 2010 5:08 am GMT

    @Rottenwood
    Guess why? Because there are NO good games on any Nintendo platform. Anyone who has one has got a very limited choice of games, so there are nothing to choose from. Any decent one is bound to become a hit. It's like a during a no-fish season even herring's salmon.

  • SuperMegaMaster

    Posted Jun 29, 2010 5:06 am GMT

    RDR rules!!

  • NiteShadeX

    Posted Jun 29, 2010 4:34 am GMT

    Michael Pachter is an idiot who doesnt understand the industry. The fans arent stupid, they'll hold their cash for quality titles. Not everyone will shell out cash for Modern Guitar Band Racing ever month.

  • Rottenwood

    Posted Jun 29, 2010 3:59 am GMT

    Nintendo games have different shelf lives than the other two platforms. 360/PS3 games have huge opening months and then disappear; big hits for Nintendo stay in the Top 10 for months or even years. Galaxy 2's "mediocre" launch sales will be a dim memory when the game is still on the charts in December. God, isn't Mario Kart Wii still in the Top 20?

  • FinalDuo1886

    Posted Jun 29, 2010 3:54 am GMT

    With all the money RS making atm. I hope that they seriously start fixing the glitches and bugs in this game. It's great game and one of the best cowboy games period, but the bugs and glitches hold it back it ton.

  • firehawk998

    Posted Jun 29, 2010 2:49 am GMT

    To me RDR is the best game hands down for 2010. Even though the year isnt finished yet and SMG 2 is getting perfect 10s all across the internet I still think this game have a high chance of winning GOTY.@SethSOMT :- Yeah man I hear you I didnt expect the ending to be like that. It will be remembered as one of the best endings this gen.

  • PatchMaster

    Posted Jun 29, 2010 2:17 am GMT

    Three must-play games in there. Get on it folks.

  • SillySkeleton

    Posted Jun 29, 2010 12:34 am GMT

    Mario Galaxy 2 sold at a 'mediocre level'?? That's a shocker. It's one of the few games that makes me really want to pick up a wii. I would have picked it up day one.

  • tbs76

    Posted Jun 28, 2010 11:46 pm GMT

    Hard to believe that Super Mario Galaxy 2 isn't doing as well as expected. It might have to do with the fact that it came out during a usually slow spring period, most people recently bought New Super Mario Bros Wii, and the fact it wasn't promoted as much as other Nintendo games. I bought RDR in May and I loved every minute of it. A game of the year contender for sure. I just bought Alan Wake and I am loving that too. Great game that deserves better sales. The big problem right now is that their are TOO MANY GREAT GAMES and not enough money to buy them all. Years ago you had time to save up between releases but now their are several good games out each month. Its a bigger problem if you own all 3 systems cause you have to decide which game you want most. Its common logic and yet these analysts act all suprised. Do they think all gamers sit at home with $300 or more disposable income to blow on games. Some do, but I am sure the majority of us don't.

  • GCwasthebestsys

    Posted Jun 28, 2010 11:15 pm GMT

    I can't believe how well New Super Mario Bros. sold early-on compared to SMG2. One game is a great, yet un-original for the most part by 2-d restraints, platformer. the other is the best game of all time. maybe it was that new super mario bros. was released during last christmas season.

  • videogameking26

    Posted Jun 28, 2010 11:11 pm GMT

    Not a mention of Split/Second at all?...Completed SMG2 and love it, liking Blur and still need to pick-up RDR, AW and PoP: FS. For May I bought only Blur, S/S, SMG2 and Shrek: Forever After.

  • chrispicard

    Posted Jun 28, 2010 10:51 pm GMT

    Too many sequels, with Too little time between them, that's the real reason sales are down, The next game in a series used to be a HUGE leap forward in graphics, physics, features, and gameplay.... now each sequel is just more of the same with little improvement. And he talks about getting money from people playing older games online soon? what about the £10 map packs we get hit with every 4 months!!!... he knows nothing... what an idiot!

  • Flint247

    Posted Jun 28, 2010 10:50 pm GMT

    May 2010 was definitely a great month for gaming.

  • SethSOMT

    Posted Jun 28, 2010 10:16 pm GMT

    The ending of Red Dead...oh my.....

  • thecraponahat

    Posted Jun 28, 2010 10:14 pm GMT

    Oh yeah i get the thumbs down for going agenst console exclusivity. Why piracy in the Xbox is just as bad? its only the PS3 that`s really not getting the piracy heat due to blue-ray

  • DSfanatic5

    Posted Jun 28, 2010 10:11 pm GMT

    I buy all my games used, for the cheaper cost, so none of my game purchases count. Tell me how this is different from piracy, and I'll give you a cookie.

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