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Poor May sales have analysts reassessing 2010

Pacific Crest's Wilson lowers full-year estimate to flat as Wedbush's Pachter pegs slumping Wii software sales as a problem; music games, annualized sports titles also trending down.

Yesterday, the NPD Group belatedly issued its US retail sales figures for the month of May. Industry watchers had expected the month to show significant gains on a parade of big-name releases including Red Dead Redemption, Super Mario Galaxy 2, Alan Wake, UFC Undisputed 2010, Lost Planet 2, Prince of Persia, and more. However, the actual numbers were somewhat subdued, with software sales up just 4 percent and total industry revenues actually down by 5 percent.

Back in black, but not picking up the slack.

Back in black, but not picking up the slack.

Today, disappointed analysts responded to the numbers. In a note to investors, Pacific Crest Securities analyst Evan Wilson said the software shortfall (he had expected 15 percent growth for May) and recent news from the Electronic Entertainment Expo have made him rethink expectations for the rest of the year.

"As more details about the 2010 release slate emerged at E3, a few games were delayed out of the year," Wilson noted, "and now with the May sales disappointment, we are lowering our 2010 industry software growth estimate to down 5 percent from flat."

As for the reasons behind the decline, Wilson pointed to three segments in specific: Wii software, handhelds, and rhythm games, all of which he said were down double-digit percentages for the first five months of the year. Music games were particularly hard hit, down 53 percent from the first stretch of 2009.

Wedbush analyst Michael Pachter also noted the slumping Wii market in May, specifically calling out "poor Wii Play sales and seemingly sustained disinterest in the console." He noted that software attach rates for the system are declining, and publishers aren't supporting the console with a robust array of games, despite the system's installed base.

"We think that Nintendo will continue to dominate sales on its console, with its first-rate lineup of games, but fear that other publishers have prematurely abandoned the very large Wii audience and see further year-over-year software sales declines for the Wii for the next several months," Pachter said. "These declines will make year-over-year industry sales growth difficult to achieve."

Wilson noted other worrisome trends, including weaker-than-expected postlaunch sales of games (with Splinter Cell: Conviction being the latest example) and soft numbers for annualized sports titles. The year-over-year drop-off experienced by UFC Undisputed 2010 was particularly disappointing for publisher THQ, and Wilson noted that MLB 2K10 was selling about the same as last year's edition, despite significantly better review scores and a bigger marketing campaign.

320 Comments

  • aaronemilio

    Posted Jul 27, 2010 3:18 pm GMT

    join my camp on ufc add as friend, GT-aaronemilio

  • F3ARLE55

    Posted Jul 13, 2010 11:04 pm GMT

    How can they expect to increase their sales if their not making the games as fun as they use to. For example splinter cell conviction, why would they take away the most popular game mode which was spies vs mercs?? i was planning on buying this game, but now....it's just not worth playing it online against the AI. i miss the good old days.

  • Zophar87

    Posted Jul 7, 2010 8:20 pm GMT

    Well, if the games were actually worth the money then they'd probably see an increase in sales.

    $50/60 for a game that I will play for a week (or less) is absolutely unforgiving and it makes me less likely to buy similar titles from the publisher. For real, when was the last time you completed a game and said you'd still be playing it 10 years from now? Yeah, I don't know either, honestly.

    These analysts are acting like it's a big deal or a shock that Wii sales are declining. Uh, duh? Most people who WANT a Wii HAVE a Wii already.

    The duplicity of this article astounds me. What astounds me even more? People are actually buying into this garbage...

  • SirMordredX

    Posted Jul 6, 2010 7:48 pm GMT

    Lolz I bet sales went up a ton when Steam had it's recent sale on.

  • Inconnux

    Posted Jul 6, 2010 4:24 pm GMT

    NPD is the most irrelevant group around. Any so called 'analysts' that don't include digital downloads are complete morons and have no clue what the industry is heading towards.

  • Alkpaz

    Posted Jul 6, 2010 2:41 pm GMT

    Retail sales? Does this include digital downloads of DLCs and full games from GOG.com, Direct 2 Drive, Impulse, or Steam?

  • Paul2004

    Posted Jul 6, 2010 1:52 pm GMT

    Dont tell me they expect everyone to ignore the current cash situation to buy new consoles and games the instant their out....idiots. Gamers will get the games but everyone has to watch the bill's and income, ppl are gettin the sack and luxury's can be hard to afford now. If they want a surge then maybe they should put special offers on stuff, but right now no one has the ability to get everything they want

  • gbrading Site moderator

    Posted Jul 6, 2010 1:22 pm GMT

    Given the economic climate a drop of this kind is likely to be expected.

  • PixelAddict

    Posted Jul 6, 2010 12:22 pm GMT

    @jamerncc1701

    Your friend has no life.

  • jamerncc1701

    Posted Jul 6, 2010 10:33 am GMT

    I have a friend who got 100% completion on Red Dead inside of a week. Games just dont go as far as they used to. The original Kingdom Hearts took me a good chunk of time to get through the first time and it was a great game. It seems as though developers are more worried about how games look and play as opposed to giving them substance nowadays and its just sad.

  • ItsEvolution

    Posted Jul 6, 2010 9:43 am GMT

    Haven't bought or played anything since I finished Heavy Rain. I don't know if my tastes are changing or if there just truly isn't anything worth my money.

  • Lerotz

    Posted Jul 6, 2010 9:41 am GMT

    You want a game that will sell AND make us nerds happy???? RE-RELEASE FINAL FANTASY VII for the PS3 and we'll talk! I bought a 500 dollar PS3 on the hopes that Square would remake it and you're not jumping on it? I don't want it on the PSP! I want it on the PS3! I have a PSP though and I loved Crisis Core, but I want a genuine remake please!

  • calvinsora

    Posted Jul 6, 2010 8:21 am GMT

    To be honest, I don't have to be an analyst to figure out that sales would go down near mid-year, especially in the economic climate we live in now. Here where I live, most games cost around $100, so I envy the $60 price tag most people complain about. Outside of that, I feel the focus is too much on multiplayer content which is a wild card in terms of value it brings to a game. Seeing as MP is some sort of silly trend at this point, I fear for the future of SP gaming sometimes. I'm not buying a game for large sums of money if it only offers a few hours of solid content. Luckily, a few great games were released in May and June that made me buy them, and I've enjoyed all of them, especially the last one: Red Dead Redemption, MGS: Peace Walker and Super Mario Galaxy 2.
    I don't see why people don't like sequels, though, they're usually better experiences as long as the devs are serious.

  • blue_francis14

    Posted Jul 6, 2010 8:01 am GMT

    I still can't get over how EALA murdered Westwood Studio's Command and Conquer franchise. I've read the Conviction is a dumbed down version from the Splinter Cell franchise? Not really sure about that. What else... hmm... few good games on PSP for this year, also for DS.

  • wwlettsome

    Posted Jul 6, 2010 7:55 am GMT

    If they are "reassessing" after May I can't wait to hear what happens when the June numbers get released. Could be total hysteria.

  • kvan33

    Posted Jul 6, 2010 7:47 am GMT

    The trend that is worrisome to me is publishers putting out halfassed games like SC:C and Prince of Persia. People will buy a quality game when it comes out. Example: Red Dead Redemption

  • sonicare

    Posted Jul 6, 2010 7:47 am GMT

    I find it kind of amusing that these "analysts" are consistently wrong on their predictions. People put so much into their "prediction" but these guys seem to be wrong more than they are right.

  • chaosrhythm

    Posted Jul 6, 2010 7:32 am GMT

    I agree with most of the other people in here. Why spend 60 bucks for half a game? Plus the fact that you can't sell back a DLC is a bit of a pain in the bum makes it feel like we're all ripped off. I'm personally glad a lot of gamers are starting to not buy off the bat that way it gives a better perspective for the industry to look at which games are definitely worth playing than others. As for the bit about Nintendo dominating sales and the first-rate lineup of games, thats a bit of a stretch in my opinion. I haven't seen a really good Wii game in the longest time aside from Brawl. Also with the Kinect and Sony Move I think Nintendo will have a hard time trying to compete at 2011. As a consumer, I'm holding off buying anything until 2011 when the prices drop down or when the new Deus Ex will come out with a pre-order bonus (that is if it has one).

  • BrianB0422

    Posted Jul 6, 2010 7:08 am GMT

    Cacaron, you just saved me from having to type all of that, which was my intention when I opened this article. Duh! Games these days are getting so stale. Just yesterday I thought about what games I am looking forward to this year. Civ 5, and SOCOM 4. Everything worth while is almost always an extension of an established franchise. Where are the new titles?

    Not to mention, the quality of games is steadily declining.

  • Ychi

    Posted Jul 6, 2010 7:06 am GMT

    @ TheKokopelli
    Great post, quality vs quantity. I am fine with sequels as long as the quality is there. This is not rocket science gamers are more than willing to tell others what they like and do not like. Beta and play testing will give you all the answers you need.  

    Reality: Too much disconnect and the Money Men dont care. Take a good example - Movie license IP's. A vast majority of them are really bad. Why? Numbers. They set a budget and if it hits its numbers they will keep pumping out garbage - that is as long as people keep buying.

    Now we are getting half finished titles pushed out with the other half sold to us as DLC so paying $60 ends up being $80-90 easily. This is why they are trying to block the right of first sale for games.

    As long as people keep spending money in a dumb fashion developers and publishers will keep pumping out garbage.

    Vote with your wallet and the industry will change.

  • jamyskis

    Posted Jul 6, 2010 4:45 am GMT

    "Reassess" is a favourite word among analysts.

  • cacaron

    Posted Jul 6, 2010 3:59 am GMT

    Reasons for this: * Games are way too expensive for their quality...I haven't seen a game that was worth his money since Dragon Age origins ( for which I pay less than 40 bucks for the PC version when it came out).
    * We need less games, but better ones...
    * Maybe new best sellers series should be worked on...Remember when halo used to be a game that was worked on for 4 years? Haven't seen much by now. (This could compromise the gaming for a time but a wheel would be installed for the next years and we would always see new games of BIG series.
    * I haven't seen a serious kind of survey made to find out what's really the target. Hope there could be a way to do so: More interesting games could be created that way.
    * Who would pay 48$ for a short game? Got a game to rent!
    Let's hope someone in the high seats of this industry manage to work on this
    I really expect games seen in E3 to respond to what I've put this post. (Let's forget about the price ;P)

  • wegotlemonade

    Posted Jul 6, 2010 3:30 am GMT

    games are cheap for the amount of fun you can get out of them

  • ABakedAlien

    Posted Jul 6, 2010 2:57 am GMT

    Analists

  • blueliquidplus

    Posted Jul 6, 2010 1:41 am GMT

    Sadly, games that are being released now are missing half the content and even worse are missing a huge chunk of what games had. My PSP is hacked with a CFW to allow me to play SNES games... why? because I prefer them over todays games. I rarely go out and buy a game on a whim and when I do I sadly regret it... recently two games I bought on a whim were Darksiders which was meh the only good part was I got Red Faction: Guerrilla out of it... another is Red Dead Redemption which I'm still on the fence about, the single player is pretty epic but its repetitive with clips of story after awhile.

    Sadly there wasn't any games in May that truly interested me and as such I'll wait for games that I want and have been waiting for.

  • zeke74

    Posted Jul 5, 2010 11:44 pm GMT

    So many good feedbacks below. I can generally conclude that people are realizing that most games coming out now are mostly first person shooters, overpriced- slightly tweaked sports titles, and sequel after sequels. All thy above are NOT worth $60. The nice thing about videogames is that they loose their value and the price begins to fall after just a few months. If people can just wait. They will SURLEY get the price they want. In the end we ALL win!

  • stziggy

    Posted Jul 5, 2010 10:14 pm GMT

    Give me a reason to spend $60. Rock Star did. The economy is forcing all of us to rethink plunking down $60 for a game. Apparently it's making developers gun shy about releasing new titles. We're in a stalemate here.

  • McGregor

    Posted Jul 5, 2010 9:56 pm GMT

    Also, I wish I were an analyst. It's like being a weatherman. All you have to do is say, "This is what will happen." and when you are wrong say, "This is a crazy unpredictable world." and you are off the hook! How many other jobs pay you mega $ to be wrong?

  • McGregor

    Posted Jul 5, 2010 9:51 pm GMT

    I agree with just about every comment (I haven't read through all of them, but so far the first 5 pages are all, pretty much, right.) Basically the industry needs to do one of 2 things, either come out with a new, worthwhile, IP; or sell us the rehashed crap at a discount. No reason to be paying $60 for "Madden 2002: 9th Cover Edition". It's simple, make a game that is worth buying, or sell us your "map pack discs" for less. The Wii should also come down in price. I know that microsoft and sony aren't game changers with their add-ons, but they do have HD graphics, and while graphics shouldn't sell a title, you will probably buy the next 3rd party motion control game on a console that has better graphics, no reason to pay full price for last generations tech.

  • Lupivdaman

    Posted Jul 5, 2010 6:06 pm GMT

    what analysts say =/= what actually happens
    It happens every year, "analysts predict an increase in sales" *2 months later* "analysts were wrong.......again"

  • Itakel

    Posted Jul 5, 2010 5:14 pm GMT

    There's nothing to buy. Still waiting Starcraft 2, coming soon in July

  • Col-Struckin

    Posted Jul 5, 2010 4:20 pm GMT

    can't they see, its when the good games are released. These "smart" analyst are not very wise.

  • snipeshot11

    Posted Jul 5, 2010 4:18 pm GMT

    What do people expect. Publishers are pumping out sequels like crazy, and its tough to find a good original exclusive nowadays. When people are giving infinity ward $15 for COD 4 map remakes and $5 for horse armor in Oblivion, of course companies are going to start just making games for the sake of making a quick buck.

  • TheKokopelli

    Posted Jul 5, 2010 4:16 pm GMT

    I wouldn't say the economy is to blame - the problem lies solely on the developers releasing crap games. When 33 of the 57 titles released in May fell under the 6.0 - 7.9 range, don't expect spectacular sales. Quite honestly, anything that range is usually put off until it's in the bargain bin, and even then, it's only a purchase when I have nothing else to play. For the record, out of the 57 titles released, only two of them were titles I could not live without.

    Another thing - we get the point. May sales stank. I do not recall a time in my 25-years of gaming when second & third quarters were filled with an abundence of must have titles. Most of them are fillers to tide us over to the big releases on 1st and 4th quarters. So lay of the articles whining about, it, as it is beginning to sound like, "Wah! May sales are low. Wah! Stupid gamers don't want our games."

    This reminds me of the two rock stations here crying because listeners have dropped. Well, genius, when you toute the line, "New Rock Station," I expect it to play, New Rock, meaning stuff that is release this year. Not the garbage that was "new" during the 80s, 90s, and early 00s. There is a reason why I subscribe to XM. This is the reason why subscription services like Game Fly and iTunes are so popular. People are tired of paying full price for something not worth it's weight in kitty litter.

  • 2point5RSman

    Posted Jul 5, 2010 3:51 pm GMT

    outstanding remarks strayfies !

  • McNeelyJ39

    Posted Jul 5, 2010 2:59 pm GMT

    I didn't buy splintercell conviction until June, I really enjoy the game but I just can't rationalize paying $60 for most games. I was waiting for it to drop to $40 on Amazon...which it never did, so I eventually caved and bought it for $42, and I bought one for my brother at $44.

    Again good game, but not worth $50 or $60 to me.

  • majere613

    Posted Jul 5, 2010 2:24 pm GMT

    You can't really blame the third parties for moving away from the Wii. Pretty much anything they can put out just gets overshadowed by the next inevitable Zelda, Metroid or Mario. If you're aiming at a market that's not more interested in those IPs, you're not aiming at the Wii.

  • guitardude1243

    Posted Jul 5, 2010 2:17 pm GMT

    Seems about the same to me. Some good games come out, some bads ones come out. Been that way since I owned a SNES.

  • DesertLynx83

    Posted Jul 5, 2010 2:12 pm GMT

    I still buy games...but most are older titles.

  • strayfies

    Posted Jul 5, 2010 1:37 pm GMT

    There used to be more power in game design. A lot of that has fizzled out to franchise pimping and repetitive, tired designs. It is NOT asking too much to want the same kind of spirit and innovation that went into the games of yesteryear. Whether or not I have more time now, at 27, doesn't have anything to do with it; the time I do have, I find pretty thoroughly wasted on FPS IX: Even More Guns. It's time for these publishers to ask themselves how much they want my $60, and I hope many of you feel the same way. If they don't listen to us, the numbers will talk much louder.

  • mischiefmeerkat

    Posted Jul 5, 2010 1:28 pm GMT

    Ncoldhardt , Traumerei112 and mission76 said it perfectly. As did many millions of others.

    Games now are really starting to suck. There's the occasional worthy title like Bioshock or dead space, but most games now are very badly done.

    Overpriced at 60 bucks for a 3 hour long beta where you have to buy the rest of the game even after paying. no stories worth remembering, or characters that hook you.

    Plus the DRM is insane, especially for PC games. limited installs or plays, no returns, refunds or credits. you buy it and your stuck with it. so less risks taken

  • hunter8man

    Posted Jul 5, 2010 1:18 pm GMT

    People aren't buying new games like they used to. Only a handful of franchises still have great selling power (Madden, Call of Duty, Halo, God of War, Final Fantasy, NCAA Football, GTA). Due to this recession, people are less likely to spend on non-familiar franchises. Personally, I've gone the route of Gamefly and rarely purchase new games anymore.

  • taxonomic

    Posted Jul 5, 2010 1:02 pm GMT

    ANOTHER May sales B.S. article?

    Come on, is it so painful to just admit this spring has been weak, game-wise? Besides RDR, what else has come out?

    Exactly.

    So the billionaires running this hobby have to settle for two yachts instead of three? Awwww, poor babies. bet they cry when they are snorting cocaine through rolled up 100 dollar bills.

  • NColdhardt

    Posted Jul 5, 2010 12:58 pm GMT

    The gaming industry has taken a wrong turn. Give us back games like Xenogears, MGS, FFVIII and Lunar -- Heck, even Crash Bandicoot -- but please don't regurgitate previous ideas over and over again.

  • Traumerei112

    Posted Jul 5, 2010 12:10 pm GMT

    The whole industry is moving in the wrong direction, franchises like COD are getting milked and selling well but great, original games like Demon's Souls are not getting appreciated, selling about 1% of COD . Everything is same old, same old, no new mechanics, no innovations whatsoever . People are SICK of games . Nintendo ruining everything with their "casual" thing and kinect/move are just beginning of disasters ... In addition, Sony announcing their first party big name games will be 3D in the future didnt help . wtheck is 3D ?

  • Traumerei112

    Posted Jul 5, 2010 12:06 pm GMT

    @ mission76 Well said .. *Applaud*

  • Traumerei112

    Posted Jul 5, 2010 12:05 pm GMT

    roemdawg: AC2 phenomenal ?? LOL

  • toddze

    Posted Jul 5, 2010 12:00 pm GMT

    the games in may were not worth buying

  • roemdawg

    Posted Jul 5, 2010 11:54 am GMT

    @Xiot,

    Hit it on the head. Assassin's Creed 2 was phenomenal, but after I beat it, I stopped playing. Lessons like that teach me not to buy games with limited content and game modes. I will get RedDead for my birthday or something, and after that I won't buy another game until Reach. Even CoD Black Ops will keep me entertained at least for a few months. People are done buying games that don't make the 60 bucks worth it, or at least beginning to realize it. That's why sales are down imo.

  • Units420

    Posted Jul 5, 2010 11:51 am GMT

    Xiot, I find it very hard to believe there aren't enough multplayer/co-op games seeing as almost every game now is geared towards multiplayer/online play at the detriment of single player campaigns. Further, I am not buying games anymore because at 27, I don't have the same time to play a game. And I get the feeling this is the case for alot of us who have had other commitments come into our lives. I know there will be those who say they can find the time to game. Good for you. Alot of us with spouses, kids and or a job or two can no longer devote 8 hours, 4-5 nights a week to it. And to add one more point, I am not at all suggesting games be dumbed down. But it gets harder to stay focused on a game that just has too much content and not great pacing for the content. Not to mention bad overworld maps and I get bored and frustrated roaming around houses and rooms that have nothing to do with the objective or progressing in the game. Its really like adding stuff to make the game longer for the sake of it.

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