Wedbush's Michael Pachter stunned by 14 percent dip in software revenue; Pacific Crest's Evan Wilson calls September the best chance for industry growth through Q1 2011.
Earlier this week, analysts Michael Pachter and Evan Wilson were split with their expectations for the game industry's August sales figures. Wedbush's Pachter projected that US retail software sales would be down a mild 3 percent, with Pacific Crest's Wilson predicting a more drastic 18 percent decline. The industry-tracking NPD Group released its August sales data yesterday, with a 14 percent software drop more in keeping with Wilson's grim assessment.
The two analysts reacted to the numbers in separate investors' notes this morning, with Pachter saying the results were "in a word, shocking." Pachter blamed the numbers on poor sales of Wii and DS games and slow starts for Mafia II and Kane and Lynch 2, the latter of which had a performance he dubbed "incredibly weak" after it failed to make the top 10 chart. Wilson focused on tough comparisons to the release slate of August 2009, saying Mafia II sold fewer than half as many copies as Batman: Arkham Asylum, and there was nothing to replace the sales Wii Sports Resort put up in its first full month on shelves.
The gaming hardware market was also gloomy, with Wilson noting that the Wii sold fewer systems last month than at any point since its launch. Pachter put the blame on the portable market, noting that PSP and DS system sales were down a combined 39 percent year-over-year.
"We believe that the iPod Touch is beginning to cannibalize dedicated game handheld hardware sales, and expect weakness in handheld hardware to persist until the introduction of the Nintendo 3DS, likely early next year," Pachter told investors.
Much like they did with their August predictions, Pachter and Wilson are taking opposing views as to whether the industry's glass is half full or half empty for the coming months.
"We believe September will mark the beginning of a sustainable rebound in software sales, as the game lineup in October (Medal of Honor, Fallout New Vegas, and Fable 3) and November (Call of Duty: Black Ops) is strong," Pachter said.
While Wilson acknowledged that Halo: Reach, the launch of the PlayStation Move, and DSi price cuts could push September sales into positive territory, he was less sure of the "sustainable" tag.
"September is the best opportunity for growth since May, and going forward including the holiday season and Q1 2011," Wilson said.
Brendan Sinclair has been a games journalist since 1999. His tastes are eclectic, though he has a definite affinity for games with arcade roots. He's Canadian, but has also been at home in Atlanta, Austin, Chicago, and San Francisco.
Well, I did buy two games this month, Kingdom Hearts: Birth by Sleep and Spiderman Shattered Dimmensions. I have Assassin's Creed Brotherhood on pre-order and will probably make a pre-order for Golden Sun Dark Dawn as well. I think sales will of course go up during the holiday season, but a ton of big name franchises have releases in the next few months, , yeah...
So no wonder they're seeing a drop in sales! There's only 6 types of games ever being churned out or announced at E3 the past few years. I said 90% of games above since there's GOOD games that come out as well that creative dev teams bless us with. Disciples 3, Recettear, Machinarium, Infinite Space, etc.. It's just a matter of shoveling through all the big budget shovelware we get year after year after year.
It's because they're ignoring the HUGE demographic that has played video games for more than 10 years. Maybe because every game plays like every other game to appease the lowbrow demographic they seem to always go for. Namely, they're all action-based to appeal to all the ADHD gamers (which are in the majority in their TweetBookFaceSpace). Here's a list of 90% of retail games and gameplay mechanics you'll see nowadays: -RTS (god forbid anything's turn based anymore, it would stifle the Strattera market) -RPGs w/o turn based anything (new hyper-ultimate-action-circle-ring-quasi-tactical-button combat system!) -Beat-Em-Ups (Demons Souls, Dante's Inferno, X-Blades, ZZzzzz...) -Weapon crafting/Ingredient gathering (Too lazy to come up with a random loot system or even simple armor/weapon shops? Easy! Just require your players to search 6 hours for random drops of 35 chickensaurus pelts, 10 flints and a horse apple! ala Guild Wars 1. Results may vary) -RPG Racing Movies (Go from point A to point B and watch a cutscene. No exploration allowed! If that alley/trail deviates from the straight line on your minimap o well. Lather rinse repeat ala FFX-FFMCMXLMIII) -Extreme aversion to any semblance of a memorable story in favor of being "NON LINEAR YAY!" -Mindless devotion to Metacritic scores as a developing team's magic 8 ball. (Duhhh should we make this 2d platformer/tactical rpg franchise a FPS or an RTS instead?) -Lack of LAN support to the EXTREME
SEGA does have a new system planned for 2012, the arcade version will be unveiled next spring. Don't believe me? http://www.kaldata.com/comments.php?catid=4&id=55129
Lower the prices for your games you corporate trash or will drive you bankrupt. That means the game needs to be 20 - 40 dollars FOR EVERYTHING in it, and you will see a huge growth in sales. That and stop milking the crud out of all your series. Otherwise no one will buy your games or we'll just play old games or buy used game or trade with our friends or pirate them. We won't buy your crap new that's fer sure cuz we sure aren't pleased with you.
does this even include purchases made through on-line retailers?! Steam, GOG, Impulse, D2D, Amazon, CD Universe, etc etc?
well, if you you read through all these comments....lack of quality and high cost with dlc extra cost is all you see. either make fewer titles and give in to more dev time or bring down the cost on the rushed glitchy stuff. I will put full money on dead space 2.
@FlamingFury Then quit complaining? I thought your region would be tied to your gamertag. Oh well at least it was answer one more than the mindless complaining your doing.
@Stoneys_Rock American Xbox = colossal lag when playing online. So no. That plan is stupid.
@DaHaloGod Surely that's standard by Australian standards, that price I mean. It's completely infeasible to expect a company to work out the price differences just to suit a particular countr(y/ies) If its as cheap as you claim surely you should purchase an American Xbox and just import?
Aussies have it the worst as far as prices go. STANDARD edition of Halo: Reach at EB is AU$120. If we convert the standard US$60 price it should be around AU$67. Its absolutely rediculous, yet prices are still going up.
the games that will bring it up are fallout cod and ACB and halo though im not a big cod fan or even like halo but they do have an enormous fan base.
it seems like those analyst preditions are never right. I know it's hard to predict, but still seems like they are doing a pretty job.
Shocking...??? What came out last month...??? EA's lucky I even purchased Madden and NCAA this summer... Besides Red Dead it's been a really slow 5-6 months... I'm not purchasing anything this month either and nothing until late October when Fallout: New Vegas comes out... November will be nice though as well as early to mid 2011 but don't expect comsumers to buy the crap they've been putting out lately...
What StSk8ter29 and RickyRevolver said. These games get shipped out with the idea that microtransactions and downloadable expansions will be part of the equation. The result is less robust games. But sometimes we get "lucky" and they give us some table scraps as a bonus, like The Betrayal of Jimmy for Mafia 2.
The only games I bought in August were either off xbox live or PSN. As usual, there weren't any decent games worth full retail value released in August, only a fool would pay full price for K&L or Mafia 2.
StSk8ter29 I AGREE, they make us pay 60$ for a game that later on gets DLC worth 10-15$ that should have been in the game in the first place *cough* RDR *cough*. I think games in reality should all cost 20$, since they are all 6hrs long with mediocre MP
Really? Is it shocking? Every brand new game costs 60 dollars when first released and if it's something like Crackdown 1 that you can beat in a single sitting it's not worth it. Especially when you consider the fact that selling it back to Gamestop the very next day will only grant you 25-30 bucks simply because the plastic wrap is gone. I'm sorry, I didn't realize plastic wrap was worth 25 dollars. Videogame companies have been ripping us off for years. The first step? Go back to selling games for 50 bucks. 50 dollars is nowhere near what the price should be, but it's a step in the right direction; and don't give me that "fair price" bull because you and I both know it's bull. The world economy is awful and the only thing videogame companies have done is raise game prices to 60 dollars. I don't even want to hear the game companies say "oh poor us"; you've been charging us ridiculous amounts of money for your halfly-made games and now you wonder why? Shut it.
it's not nintendo dragging down the numbers. it's the third party game developers who put out the shovelware. nintendo is pretty consistent in making good quality games. yeah there are a ton of horrible games for the wii but look at who makes them. you forgot to mention mafia 2 and kane and lynch for being reasons. and that's only 2 games. it's developers like that who turn people off to buying games on release with ridiculous amounts of DLC and maybe people are starting to think twice. you'll save $50 if you buy the "gold" edition later on with all the DLC included instead of paying $60 now plus the DLC that they already have out.
"Pachter blamed the numbers on poor sales of Wii and DS games . . . " There's your answer, the gimmicks that sold the Wii and DS to millions of people are finally getting stale, and attach numbers for both of those systems are tanking. A lot of people I know bought a Wii, then one or two games for it, then left it to collect dust after realizing that the motion control gimmick doesn't make the actual games fun. So you have millions of Wii systems out there in homes of people who could care less about the system anymore, and are not wasting their money on the shovelware on the shelves (of which there is tons). Same story for the DS, where Nintendo just keeps putting out new revisions every 6 months or so to try to get their diehard fanbase to buy it yet again. It is all collapsing now for Nintendo, dragging down the entire industry numbers. Take Nintendo's consoles and shovelware games out of the equation, and I bet the rest of the industry fared a lot better in terms of sales.
Just looking at August releases I'm actually surprised that Pachter is still being quoted on anything anymore. The guy is an idiot who hasn't been right about anything for a while now! My 10 year old cousin took a look at the releases for august and said "nothing good to buy this month" she has better perspective than Pachter maybe she should be quoted too :P
The problem with publishers and analysts is that they assume just because there's a period of high sales that the industry has grown. The next call of duty will sell really well, we all know that, the headline will be "video game sales up 20%", then when everyone has purchased it people will freak out. Other industries have steadier gains, people go and watch mediocre or bad movies because it's easy, not as many people buy mediocre or bad games and this difference is apparently still jarring for middle aged businessmen.
@sk_razor, your right. There is more money now then ever, that is true, but it is backed by nothing, we could literally replace every dollar with a piece of paper saying I O U "this much" and we would still have the very same system. The system of debt/monetary system is backed only by trust, which they have proven time and time again that the trust has been misplaced! Its all very much outdated for a modern society. (which, whether it wants to be acknowledged or not, is the main reason/source of most of the world's problems)
This is all because these dumb analyst think that Madden is the only game on the market. I gave up on madden in '08 so that is that. Speaking of which I really need to sell that stock!!!
@sk_razor Perfect. that is the exact truth. Corporations don't care about quality just what they can put on the market. EA and Activision, Industry destroyers. they are killing it it half done trash-ware games. give us quality and content. Don't try to milk us obviously with your market shares droping to nothing I think these CEO's should start getting a clue.
i pretty much stopped buying new games...why pay $60 now when you can get it next year for $40 or less with all the DLC they've released???
I wonder about these so called analysts, time are tough many people have either lost there job, will be losing it soon, or are cutting back because they're uncertain about their job. Sorry but individuals in this situation with half a brain aren't going to run out and spend 60 bucks on the mediocre games that were released this summer; they may not spend on games at all. Plus on top of it all it is the damn summer I don?t know about everyone else here but I don?t game much in the summer because there are things to do outside, I save my gaming for when the weather cools down.
As they say, anything's price is what people are willing to pay for it. Thats says enough on its own. In my opinions DLCs suck - but hey fools buy them. Now days its flooded with cheap-shot marketing attempts, what the big surprise to see it in games as well? Game dev is now almost entirely corporate. Do you seriously expect the greatest games ever out of unsatisfied people on a salary? Ask your grandmother if there was BIO food in her youth. She'll tell you that the ordinary food they ate was five times better and 10 times cheaper than your BIO food now. Game devs just like pretty much everyone are milking people's stupidity for every cent they can. "There is no money" everyone says... TODAY there is more money in the world than ever before. Tomorrow there will be billions more. Everybody tries to COPE instead of asking, Where did all the f..ing money go? Who took it? What are they doing with it? For how long are we going to let obsessively greedy maniacs to dictate how money mechanics works?
any game worth getting is still on the waiting list,and 60$ a game just doesn't sound as good as 50$ may be 10 but it'll add up eventually .thts why most gamers spend carefully
Wow, do these "analysts" expect us to buy every game that comes out in huge droves? I don't think they've taken into consideration the fact that nothing good is coming out for a while(cept maybe Halo Reach will sell a bazillion copies no matter how good it is). As for blaming the Iphone touch for poor handheld sales, I think it's a similar situation in that no outstanding hand held games have been coming out. Though I believe that in the future handhelds might be for the most part replaced by IOS and Android devices
Guys like Pachter don't get the jobs they have without having some form of decent ability.... however, I think even this time Pachter was so far off it hurt. Maybe he needs to start predicting for other industries where he may have a fighting chance, because clearly his last few attempts have been way off.
I have never even thought about buying Mafia II - I will wait a little bit and trade it in. Kane & Lynch 2 - meh. It's stupid - I didn't thought that I would call any game "too violent in a stupid way", but this one is truly idiotic bloodbath.
I wish I could get paid for making obvious stabs at the current gaming trend given all you have to do is look at what big hitters are being released for the month, and give a yay or nay to the growth. ;/ Halo Reach is out this month, OF COURSE the software sales are going to rise for this month, god............
After loving mafia 1, and eagerly awaiting 2, I rented the latter and was universally disappointed. I didn't even take a sideways glance at K&L. I guess Jeff Guerstmann really killed any hope for it.
Alot of people simply cant afford to buy every title that looks appealing anymore. With all the blockbuster titles around the corner, it doesnt take a whole lot of insight to realize that people are saving their money for the titles due to release in the next months.
Everything sucks compared to Rockstar and Kojima games, thats why. I'm waiting for them to release more stuff...
shocking? the only shocking thing is Gamespot's continued coverage of everything this fool has to say. Come on Gamespot staff, I bet you guys saw this coming a mile away, you're are gamers and you knew this was going to happen. I guess you guys want to stand on the sidelines and stay neutral. oh well. .
what i don't like is video game companies trying to charge us for buying used games. heck, how would you feel if toyota started charging you a premium just because you didn't buy your car new!>>?! and dlc is really getting out of control, ever since AC2 was shipped without two main story chapters, companies just followed suit, they should put all of their effort on making a good game from the start, with the dlc just "expanding" the game, not getting it piece by piece
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