NPD: October U.S. Sales Slump 19% As Wii Re-Tops Hardware

October 2009 marks another down month for the U.S. video game industry, according to retail tracking firm, NPD, with sales down 19% to $1.07 billion year on year. Thus, the month saw another disappointing slump for game retail, even as Nintendo Wii retook the top hardware spot from Sony's PlayStation 3, following the Wii's price drop. Notably, with hardware prices lower on all console platforms, volume is not making up for the decrease in cost. The PlayStation 3 took the top spot last month on the back of its price drop to $299; this month it still sold better than the Xbox 360, but less than the price-reduced Wii. Nonetheless, NPD Group analyst Anita Frazier says that this October is "the third best October on record, behind October 2007 and October 2008." Hardware Sales Video game hardware sales totaled $496.96 million dollars for October 2009, down 23% on the previous year. The Nintendo Wii, which dropped in price to $199 on September 27, enjoyed a full month of sales at its lower price -- and, in the process, retook its top spot in the hardware ranking, with 506,900 units sold. The DS and DSi combined showed a robust 457,600 units sold for the month, with the PlayStation 3 -- at 320,600 units and bolstered by a price reduction and a major marketing campaign -- outselling the Xbox 360, at 249,700 units. Sony also released its new PSP Go hardware in the beginning of the month, but the combination of the two formats sold 174,600 units for the month. The direct download-only hardware drew fire from gamers and critics, thanks to its $249.99 price tag -- however, PSP sales did increase on a per-week basis (last month, the platform sold 190,400 in a five-week tracking period.) Says Frazier, "Hardware sales were down 17 percent in units for the month, with the Wii and the Xbox 360 decreasing the most compared to October 2008. Compared to last month, which was a five-week month as compared to four weeks this month, Wii, PSP and NDS sales increased on an average sales per week basis, while the PS3 and Xbox 360 declined." The full set of U.S. console hardware sales numbers for October 2009 is as follows: Wii: 506,900 Nintendo DS: 457,600 PlayStation 3: 320,600 Xbox 360: 249,700 PSP: 174,600 PlayStation 2: 117,800 Frazier notes that the increased prices of new iterations of portable hardware -- PSP Go and DSi -- has increased dollar figures, even though overall sales are lower. Sony's strategy of bundling games and other bonuses with its PSP is also effective, she suggests: "While overall portable hardware unit sales are down, dollar sales are up thanks to an increase in the average selling price of portable hardware generated by the higher price points of the new portable systems and bundles." "Recent price cuts helped spur a one to two-month increase in unit sales, and this month's Wii sales reflect that boost, but the other platforms have not sustained the sales momentum post price reduction," says Frazier. She suggests it will be "difficult" to analyze the long-term effects of the price cuts the hardware have seen this year, since the next two months are traditionally the industry's best performers anyway. Conclusions There was no growth this month in any category, with games, hardware, and accessories all down year-on-year (18 percent, 23 percent, and 2 percent, respectively). The overall market itself is still down 13 percent year to date, with total sales of $11.43 billion, compared to $13.16 billion for the same period of 2008. Gamasutra has also published the full NPD Top 10 software chart, topped by Naughty Dog's PlayStation 3 exclusive Uncharted 2, alongside the hardware charts. "Based on typical industry seasonality, the industry is on track to generate full-year revenues in the range of $20 to $21 billion in the U.S., which would put it just a bit below last year's sales of $21.3 billion," says Frazier. NPD research suggests that while consumers believe the overall economy is improving, concludes the NPD analyst, "their outlook on their own personal situation is worsening. If consumers' personal outlook continues to erode, they could very well be much more conservative with their holiday shopping this year."