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Analyst Expects July Video Game Sales to Show Decline

12 Aug, 2013 By: Erik Gruenwedel

Consumers likely held off purchasing titles in anticipation of pending PlayStation 4 and Xbox One launches

The dog days of summer came early to the video game industry, with console/handheld software sales projected to have dropped 23% to $200 million in July — the sixth consecutive monthly decline, according to estimates from Wedbush Securities’ Michael Pachter.

The analyst attributes much of the attrition to gamers holding off until Microsoft and Sony bow their respective Xbox One and PlayStation 4 systems late in the fourth quarter.

Pachter said sales will likely be down sequentially as well, due to an extra sales week in June, as well as strong debuts for two games, Nintendo’s Animal Crossing: New Leaf and Sony’s The Last of Us, the latter of which sold close to 1 million units in June, according to The NPD Group.

July unit sales were likely led by new release EA’s NCAA Football 14 and Microsoft’s Minecraft.

“We expect packaged-goods weakness driven by deteriorating demand for current-gen content (both new and catalog games) to continue in July and for most of the remainder of the year ahead of the next-gen console launches,” Pachter wrote in an Aug. 12 note. “We expect positive growth to return in September [the launch month of Take-Two’s Grand Theft Auto V], but do not expect sustained growth until 2014, as two new consoles are expected to launch late this year.”

Meanwhile, Wii U hardware sales are projected to drop 29% to 30,000 from June; 35,000 Wii units (down 50% year-over-year), 125,000 Xbox 360 units (down 38% y-o-y), 85,000 PS3 units (down 39% y-o-y), 40,000 DS units (down 69% y-o-y), 170,000 3DS units (up 29% y-o-y), and 20,000 PS Vita units (down 58% y-o-y).

In June, combined current-generation home console (PS3, 360, Wii, Wii U) hardware unit sales were down 36% year-over-year, while handheld hardware unit sales were down 22%, resulting in overall hardware unit sales being down 29% for the month.


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