Video Game Sales Nosedive in April

The video game industry suffers a steep sales decline in April, with sales of hardware, software and accessories all posting large declines. The Nintendo Wii continued to be the best-selling console.

The video game industry experienced its worst year-over-year decline in April since July 2009, and the fourth largest year-over-year percentage decline ever after September 2000, June 2009 and July 2009, with sales falling 26 percent, to $766.2 million, from the same period last year. Year-to-date sales declined 11 percent compared with 2009, with 2010 totals standing at $4.73 billion. Hardware sales, software sales and sales of video game accessories all posted significant drops.

Hardware sales fell 20 percent YTD compared with 2009, to $2.52 billion, ringing up $250 million during the month. That's compared with sales of $392 million in April 2009. Nintendo's motion-capture Wii console continued to lead the console market, selling 277,200 units in April. Sony's PlayStation 3 and Microsoft's Xbox 360 console were neck-and-neck for second place, with the Xbox (185,400 units sold) edging out the PS3 (180,800 units sold). The portable Nintendo DS led the hardware market overall, moving 440,8000 units, followed by the Sony PlayStation Portable with 65,500 units.

"The PS3 and the Xbox 360 both enjoyed a unit sales increase over last April while all other systems declined. Compared to March 2010 on an average sales per week basis, all platforms declined between 37 percent and 63 percent. Inventory at retail could be playing a role in some of the systems' decreases," said NPD analyst Anita Frazier. "Of the platforms that declined versus year ago, the DS accounts for 71 percent of the decline. Keep in mind that the DS sold over 1 million units last April. Even with the decline, the DS was the best-selling hardware system for the month."

Software sales fell 22 percent compared with the same period last year, dropping to just under $400 million in sales. Frazier said a big contributor to the decline in software sales comes from the March 2010 new releases, which fell off more dramatically than did last year's March releases. In aggregate, March 2009 new releases dropped off by 54 percent in April '09 sales, while this year, new releases in March 2010 dropped off by 75 percent in April.

"The April software sales were more concentrated among the top-selling games than they were last year and April 2010 new releases sold more units than did last April's new releases so it wasn't the top-selling games or the new releases that were at the heart of the software decline. Those compare very favorably to last year," Frazier noted. "The genres we loosely group under the umbrella of 'casual' games (fitness, music/dance games, party games, etc) comprised only 24 percent of software dollar sales in April 2010 as compared to 36 percent last April, an indication that more core content shored up better than did some of the more casual or non-traditional content."