Video Game Sales Fall 29% in March13 Apr, 2012 By: Erik Gruenwedel
Sales of video game software and hardware in March dropped 29% to $876 million compared with more than $1.2 billion during the same period last year, according to new data from The NPD Group.
Software sales declined 25% to $553 million, compared with sales of $735 million during the same period last year, as a dearth of new releases and fading catalog interest stymied consumer demand.
Hardware sales of the PlayStation 3, Xbox 360 and Wii lagged as well, with combined unit sales down 19%, while handheld hardware unit sales plummeted 45%, according to NPD. Handheld unit sales suffered due to unfavorable comparisons with last year’s launch of the Nintendo 3DS during the same period.
As previously reported, Xbox 360 again led the market, with 371,000 units sold, down 14% from 400,000 units as estimated by Michael Pachter, analyst with Wedbush Securities in Los Angeles. PS3 unit sales declined 5% to 325,000 (from a 332,000 estimate), while Wii sales dropped 40% to 174,000 units (from a 235,000 estimate). 3DS unit sales remained flat while PS Vita sales exceeded Pachter’s projections of 125,000 units sold.
Xbox 360 software sales increased 5% from Pachter’s $225 million estimate, while PS3 software sales declined 10%, and roughly in line with the analyst’s $162 million estimate. Wii software sales plummeted 47%, and below the $87 million estimate. 3DS software sales were $29 million — down 10% from a $32 million estimate, while PS Vita software sales reached $15 million in its second month, above the $11 million projection.
“The NPD results reinforced our belief that the casual customer is drifting away and the hard-core customer has remained faithful to packaged goods purchases,” Pachter wrote in an April 13 note. “We are convinced that PS3 and Xbox 360 software sales will remain relatively flat over the balance of the year, with modest upward spikes in those months with a concentration of hard core game releases.”
Indeed, Pachter believes the gaming industry should rebound in May (and throughout 2012) with the release of touted titles Max Payne 3, Ghost Recon Future Soldier and Diablo 3, among others.
“We think that the launch of the Wii U [later this year] will help mitigate the continued deterioration of Wii software sales, although we think that the casual segment of the games industry will forever favor free-to-play mobile and social games over relatively expensive packaged products,” Pachter wrote.