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U.S. Video Game Sales Down 10% in May 45

Posted by Zonk from the stiff-upper-lip dept.
kukyfrope writes "After a strong 15.5% increase in U.S. video game sales in April 2006, May has gone the other way, posting sales numbers 10% below those of May 2005. Xbox 360 game sales and console sales alone slumped 37% and 25% respectively, but despite these declines, annual year-to-date game sales are only down 5%. Even so, analysts are not surprised, citing the transition from current-gen to next-gen systems as a dip in the market. 'We expect U.S. video game software dollar sales to decline 4% in 2006. We think that the transition is only partially complete, and believe that several bumps in the road [still] lie ahead,' said Wedbush Morgan Securities analyst Michael Pachter."
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U.S. Video Game Sales Down 10% in May More

U.S. Video Game Sales Down 10% in May

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  • SORRY (Score:5, Funny)

    by hurfy ( 735314 ) on Friday June 09, 2006 @05:01PM (#15505528)
    I'm am still playing the game i bought in April.

    I will do better next month i promise ;)
  • "We think that the transition is only partially complete"

    And you'd be right... strangely enough, most people will stick with their current consoles for months and years* more.

    *OK, well, at least another year before upgrading for the majority of console owners, and some will not be getting the next gen until the years ahead.
    • strangely enough, most people will stick with their current consoles for months and years* more.

      Exactly. I didn't buy my PS2 until it had already been out for a couple years. I bought a GameCube only a few weeks ago. If I do get a PS3 it won't be until sometime after Final Fantasy XIII is out, which won't be for more than a year. I want to get a Wii, but I'll wait for at least a year. And I have no intention of getting a 360 ever...

  • I'm doing something I've never done.... (Score:5, Interesting)

    by fujiman ( 912957 ) on Friday June 09, 2006 @05:08PM (#15505581)
    I'm planning out my game purchases. I have a 360, and love it, but the price of games is at the point where I'm planning out every purchase. I think I'll only do 3 to 4 games a year at this rate.

    Live Arcade is a different story, I'll probably buy a dozen of those.

    By comparison, I bought around 10 to 15 Gamecube games a year over the past few years. It's hard to imagine with cheapies like me around, how Sony and MS will make alot of money on AAA titles. I'm waiting until Oblivion goes down to 30 bucks, after shipping, new, on ebay.

    • You call yourself a "cheapie"? When you've been buying 10-15 new games for the past several years?

      I don't own a platform, though I would play one if I did. I generally play computer games. Frankly, cost is not my biggest issue - free time is far more valuable to me. Granted, I am a Computer Engineering major, so my time is kinda limited. Many of my non-engineer friends pretty much wasted their lives away last semester on WoW.

      You do have a good point though. I have many friends more interested in lower-
      • Gamecube has a ton of AAA games for $19.99 (Zelda Wind Waker, Zelda 4 Swords, Mario, Resident Evil 4, Monkey Ball 1 and 2, Metroid Prime 1 and 2, Animal Crossing, Kirby Air Ride, Metal Gear Solid, Pikmin 1 and 2, Resident Evil Remake and 0, Simpsons Hit & Run, Paper Mario 2, Tales of Symphonia, Sonic Collections & Gems, etc). You can get 10 amazing games for $200, whereas new games on XBox can cost $60 or more, depending on where you are. And there's no guarentee they're any good.
  • As the article pointed out, this probably has to do with gamers saving money for the next gen consoles and developers saving good titles for next-gen releases.

  • Discretionary Spending (Score:4, Insightful)

    by Mr.Sharpy ( 472377 ) on Friday June 09, 2006 @05:10PM (#15505601)
    I think we should expect to see more numbers like this in the near future, especially in entertainment sectors. Things are getting tight in peoples' budgets due to various reasons, but especially because of high energy prices. One of the first places people look to save money is in their entertainment budget (whether they think of it consciously as that or not) by cutting down on eating out, movies, music and GAMES. After that they will start to cut into other more direct quality of life areas of their budgets.

  • Month by month? Isn't that kind of stupid? (Score:5, Interesting)

    by Ahnteis ( 746045 ) on Friday June 09, 2006 @05:11PM (#15505610)
    Isn't month-by-month analysis self-defeating? I mean really, some months there just aren't many new games worth buying.
    I'd be very surprised if there WEREN'T monthly fluctuations.
    • There are some correlations. Take for example the concept of a "Summer Blockbuster". You could analyze the sales in June with last years sales and get a feel for the market. Granted, it may be due to the fact there are just no good movies. Its not like the movie industry changes platform generations.

      There is probably a fairly consistent monthly sales pattern in the video game industry. Also, based on the largeness of the market there are always people buying games, maybe to the point that every month coul
    • Isn't month-by-month analysis self-defeating? I mean really, some months there just aren't many new games worth buying.
      I'd be very surprised if there WEREN'T monthly fluctuations.

      Like the stock market, there will be fluctuations, but there should be an upward trend. If there isn't, you start to look at the reasons why. But even within each fluctuation, there are reasons for everything - the only question is whether or not they matter in the long-term. Usually, they don't - unless they keep coming up again and again and turn into a trend. But it is worthwhile to find out what those reasons are so you can identify trends earlier.

      I do think that, when you look at the Xbox 360, which supposedly had so much pent-up demand due to shortages, and then it only sold 290-some thousand units in April when the shortage was alleviated, and then actually dropped in May, you can start to look at things and say "hmmm, that's odd." Is that a trend? Maybe, maybe not, but if it's not a trend downward, then it's not a trend upward either. Either way I think you can start to worry if you're MS.
    • If month-by-month is some sort of reference to the technique I'm about to describe, sorry. But:

      They're actually comparing same month on a year-to year basis. Not April --> May but May 2005 --> May 2006, which has a tendency to be more accurate and account for seasonal trends. It's still trend-spotting and as a forecasting tool isn't fantastic, but it's not nearly as bad as April --> May comparisons and the like.

    • some months there just aren't many new games worth buying

      Of course.

      There are also fluctuations due to the cycle of generations of game consoles.

      I'm surprised the difference isn't more than 10% TBH. There's nothing intresting going on in the industry at the moment (by which I mean stuff that you can actually buy right now). Secondly, the PS3 and Wii are starting to break into the mainstream;s attention, so we can expect to see more 'disappointing' (and entirely predictable) months as people ramp down buyin
  • I *did* buy two games in april, though, Tetris DS and Phoenix Wright! Sorry Nintendo, stop making games that have excellent replay value! Please don't hurt me ^^

  • The "missing" gamers are playing WoW? (Score:4, Insightful)

    by AHumbleOpinion ( 546848 ) on Friday June 09, 2006 @05:19PM (#15505674) Homepage
    Are the "missing" gamers too busy playing World of Warcraft to go to the store and purchase something else? Is there a correlation between ever increasing WoW subscription rates and declining retail game sales? ;-)
    • Yes,

      Thirty bucks per month (2 accounts) does a lot less damage to the budget than 100+ bucks a month for games that may have no more than a few hours of enjoyable playtime in it. Since I started playing MMOs regularly, I may buy only a handful of "regular" games per year instead of 2-3 per month.

      Since my girlfriend likes WoW, that has become the mainstay, but I have discovered that I am more interested in MMOs than stand-alone games.
    • Got to be some. Not really up on current ones but...

      I know the 1st couple years i played Asheron's call i bought MAYBE 4 games a year instead of 12. Spent $240 but saved over $320 and probably twice the number of hours gaming, a good deal.

      When i played Motor City Online i only bought 1 other race game that year instead of several.

      I wonder if sales overall dropped the month after EQ expansions came out in its heyday?

      If that repeats for some percentage of WOW gamers it's got to add up.
    • Wasn't WoW already out last year and as such has influenced the numbers we're comparing with as well?
    • Or is there a correlation between ever-increasing wait queues in WoW and declining game sales? More waiting, less gaming.
    • In the past two years, I've bought WoW and approximately 10 other videogames. 2 of those games do not compete with WoW (DS titles which I play when travelling). The other eight are gathering dust. In the two years immediately prior to WoW, I probably bought or was bought ~25 games, and finished them all. Even at $15 a month WoW is probably saving me money because it sucks up 99.5% of the time I care to spend playing games.
  • If they expect videogame sales to never decline then they need to weed out the crud that comes out every month. You can't just purchase a videogame on the whim anymore without wondering if you just bought a stinker with pretty graphics. Hell, you can't buy anything on a whim anymore for fear that you won't have enough money later to pay for gas
  • It's those damn swashbuckers, I tell'ya!
    Maybe there haven't been any new really good games people would buy.
    Maybe they're just too expensive.
    Maybe people just didn't feel like to buy any games.
    What kind of useful conclusions are we supposed to take from these news?
    Hmmm... I guess that's why I'm not an expert or analyst or whatever they call themselves.
    • Or you could read the article before going off on a tirade; piracy isnt even mentioned. But don't stop the truth from stopping you from being pretentious. This IS slashdot after all.
      • Was just trying to make a joke ala RIAA, you know, if the business is bad then it's surely because of all that piracy!... I knew I should have put a smiley in there somewhere.

  • What came out in those months? (Score:3, Insightful)

    by SuperMog2002 ( 702837 ) on Friday June 09, 2006 @05:55PM (#15505941)
    The question is, what big hit came out in May of last year, or what came out in April of this year? Major hits don't come out every month, nor do they come out on the same months each year, and they have a huge effect on monthly sales. Simply seeing month over month numbers without this information doesn't tell you much about how the industry as a whole is doing.
  • I have a feeling there will be a huge spike (DS Lite) on June 11th that will last for a few weeks.

  • oblivion (Score:2, Insightful)

    by schwal ( 836247 )
    once all the 360 people bought oblivion, they spent 80 hours on it and didn't buy anything else.

  • 'Transition' my ass, NPD (Score:3, Interesting)

    by Rosebud128 ( 930419 ) on Saturday June 10, 2006 @12:36AM (#15507612)
    I love how the NPD doesn't define how long a 'transitional year' is. When 2005 year sales fell, NPD also blamed it on the 'transition'.

    So how long is that transition, NPD? Out of the 5 year console cycle, is it one year, two year, THREE years?

    In business as in the military, you have to have what is called a contigency plan. What if the decline in sales is not a transition but an actual slowdown of the video game market? NPD is not serving its customers proper information when they keep insisting it is the 'transition'.

    Keep in mind that Japan's market has been slowing down significantly for the last few years. Only with the phenomenon of the DS has Japan's slump reversed. Europe's market is soon going to be surpassing America's if NPD's 'transitional period' keeps going on for several more years.

    Fact: The next-gen handhelds are already released and both the DS and PSP are selling flatly.

    FACT: One next-gen console, the Xbox 360, is out, in stock everywhere, and cannot outsell the PS2 in America. With the lack of significant Xbox 360 software for all of this summer, Xbox 360 may actually fall in sales just as it did this month from last month. At this same time, the Xbox (having a price reduction) was outselling the Xbox 360 by this month. At this rate, the Xbox 360 will perform, at best, on the same level as the Xbox but most likely will sell less.

    FACT: The sales numbers they using for the percentage increase (and percentage decrese) is total sales dollars, not sales units. Of course, sales went up in April with the expensive $400 Xbox 360 was in stock. All the prices are going up for next generation. The DS costs more than a Gamecube. The PSP costs like $200 with $50 games. The Xbox 360 is $400 with $60 games. The PS3 is going to be a whopping $600. The only system that will be the same (or less?) price wise is the Gamecube -> Wii at $200.

    Of COURSE sales numbers will go up if prices go up. But are the number of gaming customers up? Are the number of software units sold going up? The answer is no. They are dropping down. And if the Xbox 360 and the new handhelds are any indication, it is not because of the 'transition'. It is because the market is...

    1) Scared by the higher prices and/or waiting for them to drop (PS2 sales went up due to a price decrease. GBA is still outselling both the DS and PSP.)

    2) The number of active gamers is decreasing due to getting bored (as opposed to growing leaps and bounds as has happened).

    Compare the sales numbers of the US to Japan and Europe and you'll find that US is no longer as 'big' as it used to be. 2004 was the game industry's biggest year. Since then, its been in free fall.
    • Um, I just want to say that NPD sucks. They don't release numbers to the public, so we have no way of tracking them to try and analyze whether they're just making shit up. I also am not sure that they get sales information from all of the major retailers, so we have no way of knowing if their numbers (even if accurate) really reflect what's going on.
      • That is correct.

        NPD cannot track online sales (for last year it said PC gaming was dying but PC gaming market is actually healthy with MMORPGs and even digital distribution now for many games).

        NPD does not track Wal-Mart, Target, and Toys R Us. Overall, I believe NPD is only able to track a little less than half of all the retailers (someone correct me if I'm wrong). I believe NPD attempts to account for this involving intresting uses of statistics. Places like Toys R Us and Target are some of Nintendo's bi
    • All the prices are going up for next generation. The DS costs more than a Gamecube.

      I think you meant to write Gameboy Advance since the GC is in a different market and is only cheaper because it's old and saw a few price drops already.
  • Heaven forbid we put some money in the bank, pay bills, take care of other things first. Although I havent bought a game in 2yrs, since I now just play Open Source/Free ones.
    • The last system I owned was a nintendo64 and thatw as bought for me by ex in 1999. That say soemthing to you about my thoughts on console games. I'm with VGfort on this i'm an open source/free game guy then again I just play pc games these days. I did the console game thing from back before the Atari 2400 back when it was pong and the then high tech light gun. Yes kids back when Apple 2c's werent even showing up yet!
    • > Although I havent bought a game in 2yrs, since I now just play Open Source/Free ones.

      Sounds like the terrorists have already won...
  • stop making crappy games and going ZOMG LOOK AT THE GRAPHICS gameplay waht is that story what is that? but look at how pretty it is.

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