NPD: Still Plagued By Tough Comparisons, Game Biz Falls 23 Percent In May

Although analysts had warned of a spring slump in NPD U.S. console video game hardware and software sales numbers, due to challenging year-over-year comparisons, May's results were even worse than forecasted, as the industry overall fell 23 percent. The retail game business as a whole saw $863.3 million in sales during the month, as it continues to be challenged by last Spring's blockbuster launches of Super Smash Bros. Brawl, Grand Theft Auto IV and Wii Fit, which launched in March, April and May 2008, respectively. Analysts had predicted declines in software sales of around 17 percent, and they were precisely on the money; video game software sales fell to $448.9 million during the month. Since major software launches generally correlate to strong hardware sales, the game hardware segment was also hard-hit, falling 30 percent to $302.5 million. Accessories also slipped 25 percent to $112 million. The NPD's Anita Frazier puts the numbers in context: "The video games industry continues to struggle with difficult comparisons to last year, and this is the first month that industry sales have dipped below $1 billion since August 2007," she says -- adding that it's common for May to be one of the industry's weakest months in any given year. Frazier says that price reductions at retail exacerbated the damage. "Unit sales declined less than dollar sales did," she says. "The dollar sales decline was exacerbated by a decline in average retail prices for almost all of the categories." As has been the norm for many months now, Nintendo platforms led hardware sales, with DS selling 633,500 units -- doubtless supported by the early April launch of the new download-enabled DSi. Wii came in second with 289,500 units. "Every category declined versus a year ago with the exception of portable hardware sales which was bolstered by the continued strong sales of the Nintendo DS including both the DSi and the Lite," Frazier observes. Hardware sales in units for each platform during May 2009 were as follows: Nintendo DS: 633,500 Wii: 289,500 Xbox 360: 175,000 PlayStation 3: 131,000 PlayStation 2: 117,000 PSP: 100,400 Nintendo also dominates the software charts, with half of the top ten being its own first-party titles. But the brightest spot is THQ's UFC 2009 Undisputed. It's enjoying breakout success for both SKUs, topping the list with 679,600 units on Xbox 360, despite launching more than halfway through the month -- on May 19 in the U.S. Unsurprisingly, Wii Fit continues to hold on to a high position as it has without interruption since it launched, coming in second. The full top ten list is as follows: 1. UFC 2009 Undisputed (THQ) Xbox 360 - 679,600 2. Wii Fit (Nintendo) Wii - 352,800 3. EA Sports Active (EA) Wii - 345,800 4. UFC 2009 Undisputed (THQ) PS3 - 334,400 5. Infamous (Sony) PS3 - 175,900 6. Pokemon Platinum (Nintendo) DS - 168,900 7. Mario Kart (Nintendo) Wii - 158,300 8. Punch Out!! (Nintendo) Wii - 156,900 9. X-Men Origins: Wolverine Uncaged (Activision) Xbox 360 - 120,700 10. Wii Play (Nintendo) Wii - 109,800 Says Frazier, "While there were some very strong new releases this month along with continued strong sales of evergreen games, this month's top 10 games sold 2.6 million units combined, whereas last year the top 10 sold 3.7 million units. Again, this illustrates how tough the comparisons are to last year." Of course, NPD only deals with revenues created via console retail sales, meaning that any growth in online gaming (from PC World Of Warcraft subscription revenues to Club Penguin and beyond), increasingly an important part of the market, cannot be easily tracked. One analyst recently estimated that 2009's online game revenues might be as high as $11 billion of a total worldwide yearly market of $44 billion.