May Game Retail Figures Slump

People aren’t buying, and recent sales data says why.

May’s financial stats contain bad news for the game industry. Retail slumped by 28%, compared to the same period last year, and that means over $202 million just got wiped off the bottom line. By far the biggest contributor to the slump was hardware sales, which show a decline of 39% when compared to last May’s figures. In part, that can be attributed to people hanging on to old consoles as they wait for the next generation to come out. However, the more worrying statistic has to do with game sales. Not that many new titles came out, and that meant consumers didn’t bother to buy.

According to analyst Anita Frazier, there were 27% fewer new titles released up to May 2012, over the same period the previous year. That really hurt retail overall and was one of the biggest contributors, after ageing hardware, to the latest financial dump. “A title obviously continues to see sales beyond its launch month,” she went on to say, “so there is a longer term impact from a narrower array of available new content.”

This also means that software retail sales failed to hit the estimates previously announced by financial analysts. Wedbush Securities, for example, bet that software would hit the $350 million mark, when in fact it only managed to get as far as $335.2 million. Software saw a 16% dip in its May figures, compared to 2011.

It’s not all gloom and despair. We’ve seen Diablo 3, Max Payne and Ghost Recon so far, which is bound to perk things up a bit in future stats. Plus, as Frazier points out, there are other numbers to be considered. Microtransactions, mobile apps, subscriptions – these draw in huge numbers each month and, of course, there’s still a used and rental games market out there, much though some game companies may wish it wasn’t. These extra stats make up about 40% of the total consumer spend on games. Says Frazier, “We would estimate the total consumer spend in May to be $1.17 billion,” thanks in no small part to the mobile apps and microtransactions crowd.

So it’s time to be thankful for the Angry Birds and Triple Towns of this world; it seems they’re helping keep the industry afloat.

Source: Gamasutra

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