If the latest sales data are any indication, the videogame industry may be headed for a rough holiday season. NPD Group reports that revenue from consoles and software plummeted during October, falling 16.4 percent from September and 19 percent year-over-year. It was the industry’s seventh consecutive monthly decline.
No doubt about it now, the Wii’s appeal is beginning to wane. Reporting first-half earnings this morning, Nintendo said it sold just 5.75 million of its flagship gaming consoles, a massive decline from the 10 million sold during the same period last year. As a result, Nintendo’s operating profit fell 52 percent to 64 billion yen, missing the company’s own forecast of 100 billion yen, as well as estimates of analysts, who were expecting 90 billion.
Nintendo President Satoru Iwata likes to say that game console price cuts aren’t the cure-alls many believe them to be. “People often talk about the price cut as if it’s an almighty weapon,” he said this past summer. “The fact of the matter is what a price cut can do is rather limited.” But Nintendo is cutting the price of its Wii videogame system just the same.
The videogame industry may be recession-resistant, but it is clearly not recession-proof, as some once claimed.
If it was, surely we wouldn’t be seeing the sixth consecutive month of declining sales reported by NPD. According to the market research firm, overall sales in the United States in August of hardware, software and game accessories were $909 million–a 16 percent drop from the same period a year ago.
The PlayStation 3 price cut is a rumor no longer. Hoping to bolster sales in advance of the holiday shopping season, Sony Tuesday announced a new slimmer verison of the game console and slashed $100 off its price.
It’s been a long time between weekend updates, and a long week without Peter Kafka, All Things D’s intrepid MediaMemo reporter. He returns Monday, and just in time, too, since John Paczkowski and Digital Daily will be out all next week. Must be August–do Europeans still take the whole month off? Or is that an urban legend? No matter; it definitely has not been sleepy around here.
Nintendo really should have cut its losses yesterday and cancelled its E3 press conference after Microsoft’s Project Natal demo. How could it possibly have trumped Redmond’s controllerless game control system? Certainly not with a blood pressure monitor.
Is the Wii juggernaut finally slowing? Perhaps. In March, Japanese sales of Nintendo’s wildly popular game console fell below those of rival Sony’s PlayStation 3 for the first time.
So those rumors of a PlayStation2 price cut? True. Rumors of a similar cut for the PlayStation 3? Not so much… Confirming recent speculation, Sony this morning said that it’s dropping the price of the PlayStation 2 from $129 to $99.99 as of April 1. But it aggressively dismissed reports of a PS3 price drop as false.
“Our love affair with the iPhone began by simply touching it. This was rapidly becoming the most important device I had ever owned, it was an all-encompassing, complete device. And I knew that that device was going to enable incredible things for gaming.” That breathless and swooning introduction aside, ngmoco co-founder Neil Young’s keynote address at the Game Developers Conference today was a noteworthy one in that it really heralds the arrival of the iPhone as a gaming platform.
So the seemingly unfailing demand for Nintendo’s Wii? Failing. Though Wii manufacturer Nintendo posted a 21 percent gain in quarterly operating profit on brisk demand for the videogame console, it slashed its forecast for full-year sales of the device.
Playing videogames in a recession doesn’t make them any less fun–even if that recession is the worst we’ve seen in 50 years. Though the economy shuddered and slowed in December, videogame industry sales rose nine percent in the states. And for the year, sales of games, consoles and accessories grew 19 percent to $21.3 billion, from $18 billion in 2007.
With the econalypse still playing havoc with global finances, holiday shoppers are behaving pretty much as you’d imagine. They’re spending less–presumably, saving up for that awful rainy day when discretionary income is better spent holding onto their homes than on another Wii game under the Christmas tree.
In a month when some 533,000 jobs were lost nationwide, Americans bought an astonishing amount of videogame paraphernalia–$2.91 billion worth, according to market research outfit NPD Group. That’s a 10 percent increase over November 2007. Said NPD analyst Anita Frazier, “With $16 billion realized for the year so far through November, the industry is still on pace to achieve total year revenue of $22 billion in the U.S.”
John Paczkowski has been poking fun at the tech industry and the personalities that drive it since 1997. From 1999 to 2007, he wrote the award-winning tech news Web log Good Morning Silicon Valley for the San Jose Mercury News, Silicon Valley's daily newspaper. Read more »
Here is a statement of my ethics and coverage policies. It is more than most of you want to know, but, in the age of suspicion of the media, I am laying it all out.
12:58 AM: Breakfast: Two schools of fish from Tokyo Bay. Calories: 782,000. How I was feeling when I ate this: confused, irradiated, hating my size.
11:37 AM: Exercise: “Taxi Stomp” (alternating legs, for 30 blocks). Calories burned: 148,900,183.
1983. The Beatles announce their first tour in thirteen years, but likewise announce that Michael Jackson will be going on tour with them as a one gigantic mega-concert event.
Best video mashup ever.
A Facebook Memorial
Wow.
Worth it for the Rickrolling photo alone.
Excellent.
Flughumor!
… you vacuous, toffee-nosed, malodorous perverts
Stephen Fry and zoologist Mark Carwardine meet the kakapo — a fat, flightless and very randy rare parrot.
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