John Paczkowski

Recent Posts by John Paczkowski

Videogame Industry in Massively Multiplayer Sales Decline

gameoverThe videogame industry may be recession-resistant, but it is clearly not recession-proof, as some once claimed.

If it was, surely we wouldn’t be seeing the sixth consecutive month of declining sales reported by NPD. According to the market research firm, overall sales in the United States in August of hardware, software and game accessories were $909 million–a 16 percent drop from the same period a year ago.

Hardware sales were down 25 percent for the month and 17 percent for the year. Software fared little better. It was down 15 percent for the month and 14 percent for the year.

Six straight months of falling sales. Overall, the industry is down 14 percent for the year, earning nearly $9.1 billion so far in 2009, according to NPD. Is this a trend that can be dismissed with the standard “well, software drives console sales” explanation? I’m not so sure. It’s not like Mario Kart and Madden NFL 10 have disappeared from the shelves. Indeed, they’re still top-selling titles. They’re still driving sales. They’re just driving a hell of a lot fewer of them.

Indeed, Electronic Arts (ERTS) CEO John Riccitiello bemoaned this very fact in an email to employees, released yesterday. “It is discouraging that one of our highest-rated and best-marketed ‘Madden’ titles in years is facing strong headwinds,” he said, adding industry trends “present a challenge.”

Perhaps that’s because we’re in the middle of the worst American recession in 50 years and $40 for a videogame is still $40. I’ll bet $5 and my old Intellivision that the videogame industry will post its first year-over-year loss since 2004 this year.

Hardware Sales:

  1. Nintendo DS     552.9K
  2. Wii     277.4K
  3. Xbox 360     215.4K
  4. PlayStation 3     210.0K
  5. PSP     140.3K
  6. PlayStation 2      105.9K

Top 10 Software Sales:

  1. Madden NFL 10 (Xbox 360, Electronic Arts): 928,000
  2. Wii Sports Resort (Wii, Nintendo): 754,000
  3. Madden NFL 10 (PS3, EA): 665,000
  4. Batman: Arkham Asylum (360, Square Enix): 303,000
  5. Batman: Arkham Asylum (PS3, Square Enix): 290,000
  6. Madden NFL 10 (PS2, EA): 160,000
  7. Dissidia Final Fantasy (PSP, Square Enix): 130,000
  8. Wii Fit (Wii, Nintendo): 128,000
  9. Mario Kart Wii (Wii, Nintendo): 120,000
  10. Fossil Fighters (DS, Nintendo): 92,000

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I think the NSA has a job to do and we need the NSA. But as (physicist) Robert Oppenheimer said, “When you see something that is technically sweet, you go ahead and do it and argue about what to do about it only after you’ve had your technical success. That is the way it was with the atomic bomb.”

— Phil Zimmerman, PGP inventor and Silent Circle co-founder, in an interview with Om Malik