The video-game industry isn’t recession-proof after all. One of the latest victims of falling retail sales, the industry is continuing its downward spiral.
Although the industry continued to perform well as other retail sectors struggled at the beginning of the year, the last five months are evidence that spending is tightening in a typically more resilient home entertainment category.
According to the NPD Group, video-game sales fell for the fifth consecutive month. The year-over-year numbers are perhaps most telling. In July, the industry had sales of $848.9 million, down 29 percent from $1.1 billion in July 2008. Year-to-date sales settled at $8.16 billion, down 14 percent from the year-ago period.
Summer Doldrums
The summer tailspin was particularly sharp. NPD reported the industry saw a 31 percent decline from the year-ago period in June. But total sales still reached $1.17 billion. In July, sales were down 27.4 percent from June.
Hardware was the largest culprit in the industry’s weakened position. Hardware sales dipped 37 percent in July to $280.94 million. July 2008 sales, by contrast, totaled $447.71 million. Meanwhile, software and accessory sales dropped 26 percent in July.
“In order for the industry to come in flat or slightly up for the total year, the back five months of the year have to come in 11 percent (or more) higher than the last five months of last year,” NPD analyst Anita Frazier wrote in a report Thursday.
“While year-to-date results are weak, there are some big titles set to be released over the next several months, including Madden (10, from Electronic Arts) this month, which should help spur sales,” she wrote. “The worst … should be behind us, and looking beyond August, we have The Beatles: Rock Band, Halo 3: ODST, and, of course, Call of Duty: Modern Warfare 2 to look forward to.”
A Positive Q4 Outlook
In positive…