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Game Industry Suffers Fourth-Worst Sales Decline Ever

| 14 May 2010 15:38
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The videogame industry took a vicious pounding in April, suffering its fourth-largest year-over-year sales decline ever, according to new numbers from the NPD.

I don't normally bother with monthly NPD numbers, because to be brutally honest, most of us don't really care if the DS is down or the PS3 is up. But when the entire industry gets curb-stomped into goo, it's worth a moment's pause, even if only to ask ourselves what just happened. And boy, I think it's fair to say that April was a nasty thumping for everyone.

The overall videogame industry was down a whopping 26 percent year-over-year in April, with sales of $766 million for the month, compared to $1.03 billion in April 2009. Game software was down 22 percent with sales of $249 million compared to $392 million over the same period last year, while hardware was off 37 percent, $249 million versus $392 million. That's gotta hurt.

It's the worst year-over-year decline since July 2009 and the fourth-worst ever, according to NPD analyst Anita Frazier, but it's not quite as apocalyptic as it may look. Inventory shortages could be a problem, she said, and plain bad timing was also a factor. "Some of the decline is explained by the shift of Easter timing," she explained. "In April 2009, consumers attributed $55 million of industry sales to Easter as a purchase occasion, which would account for about 21 percent of the decline from last year since Easter purchasing happened in March this year."

The one bright spot in all this was for the PlayStation 3, which was the only console to post growth for both the month of April and the year to date. On the opposite side of the coin, the Nintendo DS was far and away the biggest loser; it was the month's top-selling console but saw its sales tumble from more than one million units in April 2009 to 441,000 in April 2010.

"The portable side of the industry contributed more than its fair share to the industry decline," Frazier noted. "The portable business across hardware, software and accessories accounted for 25 percent of total industry dollar sales in April but declines in portable sales compared to April 2009 accounted for 61 percent of the total industry decrease."

Frazier said a "big contributor" to the software sales decline in April were actually the new releases that came out in March 2010, which tailed off much more quickly than the new releases of March 2009. "In aggregate, March 2009 new releases dropped off by 54 percent in April 2009 sales, while this year, new releases in March 2010 dropped off by 75 percent in April," she said.

April 2010 is noteworthy for another reason as well: After a ten-year run on the charts, the NPD has finally decided to stop publishing PlayStation 2 sales figures. All in all, I'd say this is a month that's really best forgotten.

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