The video game industry witnesses a disappointing October after a small hike in sales last month, with industry sales falling 19 percent overall.
After the video game industry received an encouraging boost last month from
the release of the highly anticipated "The Beatles: Rock Band" title and a
slight improvement in hardware and software sales, research firm The NPD Group
reported that sales dipped once again in October.
The firm said hardware sales fell 23 percent and software sales dropped 18
percent. Overall industry sales dropped 19 percent to $1.07 billion, a
troubling sign as the industry moves into the important holiday shopping
In the ongoing console wars, Nintendo's motion-sensitive Wii console jumped
back to the No. 1 spot in console sales, with 507,000 units sold in the United
States. Sony, whose PlayStation 3 (PS3)
console took the top spot in September, dropped back to second place with
321,00 units sold. Microsoft's Xbox 360 console placed third in sales with
250,000 units sold. NPD reported sales of video game accessories dropped 2
percent. "The continued economic turmoil, and in particular the troubling
unemployment rate, is undoubtedly impacting industry sales," NPD analyst
Anita Frazier said in a statement.
One recent bright spot in the industry was the release of Activision's
"Call of Duty: Modern Warfare 2." Released Nov. 10, the title saw
sell-through sales of $310 million
America and the United Kingdom
in the first 24 hours, according to internal Activision estimates.
Wedbush Morgan analyst Michael Pachter told
Reuters that despite the
release of interesting games, the uncertain economy is curbing consumer
interest. "It's clear that the consumer's not back yet," said Pachter.
"The games were good, but hardware was surprisingly low."
Since February, video game sales continued an economic slide until August,
when sales fell 16 percent, to $908.7 million. In September sales picked up,
albeit slightly; total sales of software and consoles rose 1 percent to $1.28
As the holiday shopping season fast approaches, the industry is hoping to
lure customers with sharp discounts on consoles. Sony recently cut the price of
the PS3 to $299 and last week announced a new PS3 system with a 250GB hard
drive that will hit store shelves on Nov. 3. The PS3 250GB system has the same
design and features as the 120GB system, but with a 250GB built-in hard drive
and a cost of $349.99. Microsoft and Nintendo also recently cut prices on their
console systems, with the Xbox 360 reducing in price to $299 and the Wii
getting a $50 price cut, putting the console at $199.
Nintendo of America President Reggie Fils-Aime told Reuters that although
sales of the Wii and handheld DS player (which led hardware sales last month)
were down in October, he is confident the two products will make a strong
showing over the next two months. "Our projections for November and December
continue to be very strong," he said. "We have seen some holiday seasonal
pickup, which means consumers are out and buying."