Analyst: Expect July Game Declines, PC Sales Down 12%
By Matt Peckham
July 09’s NPD video game sales data won’t be available until Thursday, but bet on a fifth consecutive month of declines, says Wedbush Morgan analyst Michael Pachter. In rough figures, that’s sales of $500 million, down 16 points from last year’s $592 million for the same period.
The bad news: July 2008’s sales period was comparable to July 2009’s, so pinning the sales malaise on absent franchises like Halo or Grand Theft Auto doesn’t account for the attenuated showing this round. That said, WM notes 18 games sold over 100,000 units in July 2008, as opposed to an expected 15 in July 2009.
The slightly less bad news: The extended drop may have as much to do with dwindling sales of last generation parts as the economy. WM estimates $475 million in sales from new platforms (including the PSP and DS), so the sales decline is in part due to last-generation saturation/fatigue/disinterest.
Estimated July 2009 Console Hardware Sales
305k – Wii
190k – Xbox 360
135k – PlayStation 3
Meaning? WM says its estimates represent a 36% year-over-year and 22% year-to-date console sales decline. As such, WM is betting on a price drop from Sony by October and a possible reaction from Microsoft after the latter evaluates the consumer response to Sony’s new pricing. A Wii price drop, given Nintendo’s increasingly lagged sales, isn’t out of the question either.
Tally those numbers and you get $367 million in sales, down 15% compared to $436 million in 2008. Year-to-date software sales are down 12% compared with 2008’s 26% growth (add 23% if you include PCs). By way of explaining the drops, WM cites economic weakness, a much weaker 2009 lineup to date compared to 2008’s blockbusters, increasingly season-specific Wii purchases, i.e. lower off-peak sales, and finally–possibly in reference to Sony’s unswervingly boutique PS3 pricing–“weak hardware sales arising from price fatigue.”
WM’s price-drop speculation:
– 80GB PS3 model cleared @ $250 (from $400).
– 120GB PS3 Slim for $300
– 60GB Xbox 360 Pro cleared @ $200 (from $300)
– 120GB Xbox 360 Elite for $250
– $100 Nintendo DS (from $130)
– $150 Nintendo DSi (from $170)
– $130 PSP (from $170)
– $200 PSP Go (from $250) in 2010
One turnaround point: August 2009, when WM predicts software sales will return to growth, finishing at an estimated 30% or higher in September.