May 2009 Video Game Sales Tumble 17%, Slump Continues

PC games sales in the U.S. fell 40% to $29 million in May, reports analyst Michael Pachter in his May report following NPD's sales numbers, released last night. May spelled bad news for consoles, too, with software sales down 17% to $450 million. Put the two together (hardware, software, including PC sales) and you get a drop of 23%, year-over-year. Also: It's the third month of consecutive game industry sales declines.

"The video games industry continues to struggle with difficult comparisons to last year, and this is the first month that industry sales have dipped below $1B since August 2007," writes NPD analyst Anita Frazier, noting that May is commonly a low revenue month for the industry perennially. Another reason for dollar sales decline was a drop in average retail prices, says Frazier, adding that unit sales declined less than dollar sales.

Say it with me, "every cloud has a silver lining." This one too. While every category declined versus its sales a year ago, Frazier says portable hardware sales were bolstered by the incredible (but definitely not edible) Nintendo DS, in turn buoyed by the release of the new, camera-tastic DSi.

Hardware

634k - Nintendo DS
290k - Wii
175k - Xbox 360
131k - PlayStation 3
117k - PlayStation 2
100k - PSP

Not much to say this month, other than to point out the DS sales lift, though sales of the system were down markedly after April's rally to 1.04 million units (the DSi was released in the U.S. on April 5th).

I'd note that the PSP shows especially poorly here for two reasons: One, Nintendo hasn't experienced a commensurate drop in DS sales, so there's no reason to view it as a decline in handheld interest, and two, the PSP was at one point, and for a sustained period, surpassing both the PS3 and PS2 in unit sales. Chalk the contraction up to the system's relatively high price and lack of big name game releases (like last year's God of War and Final Fantasy exclusives).

To the extent price is the determining factor, Sony's decision to release the PSP Go at a price point of $250 this fall looks even more baffling. Michael Pachter may "regret" his comments about said price point being a "rip off," but--with apologies to Sony PR, who almost surely took aim at him behind the scenes for speaking so candidly--I'd say he's squarely on the money.

The upside? Sony's got Final Fantasy: Dissidia and Gran Turismo PSP lined up for later this year. My two cents, just skip the PSP Go altogether, spring for the larger-screened PSP-3000 for $80 less, and lavish your savings on a couple extra 16GB memory sticks to harbor all those direct-digital games you'll be downloading.

Software

680k - UFC 2009 Undisputed / Xbox 360
353k - Wii Fit / Wii
346k - EA Sports Active / Wii
334k - UFC 2009 Undisputed / PS3
176k - InFAMOUS / PS3
169k - Pokemon Platinum / NDS
158k - Mario Kart / Wii
157k - Punch Out!! / Wii
121k - X-Men Origins: Wolverine / Xbox 360
110k - Wii Play / Wii

Confession, I'd never heard of UFC 2009 Undisputed until I saw this list, which just goes to show how closely I follow mixed martial arts video games. Still, over a million of you do, which is reason enough for me to sit up straight and pay attention.

Another month with two PS3 games charting (compared to last year, when the 360 owned three or four of the top slots and Sony was lucky to grab just one). It'll be especially interesting to see how inFAMOUS (PCW Score: 90%) fares in June sales, since that 176k accounts for the last few days of May (the game released on May 26th).

The theme of "difficult year-over-year comparisons" continues this month, same as last. Frazier says that "while there were some very strong new releases this month along with continued strong sales of evergreen games, this month's top 10 games sold 2.6 million units combined, whereas last year the top 10 sold 3.7 million units," adding "Again this illustrates how tough the comparisons are to last year."

Wedbush Morgan's Pachter agrees: "We had expected a difficult comparison to last year’s continued GTA IV and Wii Fit launch, and the results confirmed our expectations."

Ironically, Wii Fit's still in the top 10 a year later.

What's on deck for June? The Sims 3, Prototype, Red Faction: Guerrilla, Tiger Woods PGA Tour 10 (could be big on the Wii per the bundled Wii Motion Plus accessory), Ghostbusters, Overlord 2, and if you place any stock in movie tie-ins, Harry Potter and the Half-Blood Prince. I thought the last game was perfectly decent, actually--much better than prior versions, or most movie tie-ins that aren't The Chronicles of Riddick, in fact.

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