May Slump For Video Game Industry

Diablo lll has ruled the top of the charts since its release along with Max Payne 3 in second place, and Ghost Recon Future Soldier in third. However, sales for these titles have not been able to turn around the 28% drop in sales year-over-year for the month of May, according to marketing research company NDP Group.

May isn’t the only downer either. Every month this year has resulted in double digit drops, with February being the best showing so far with a rather large 20% decline. The only area that seems to be doing better is video game accessories, which is up 7% from last year. NDP explains this is because of a 74% boost from video game card sales from last May as well as “the continued success of Skylanders.” I didn’t even know what thas was until now.

All hardware platforms saw a decline in sales as opposed to last year. The exception to that rules is the 3DS which posted a 17% increase since last May. Thanks to the price cut of the DSi and DSi XL the Nintendo DS also gained a 35% increase in sales in May from April of this year. PC games have done pretty well this year too thanks in no small measure to the success of Diablo lll:

PC Games sales realized a year over year increase of 230% realizing $80MM in sales, which softened the decline in software sales overall.
Diablo III is the top selling title for May, the first time since July 2010 that a PC-only game accomplished this feat. Since the game launched day and date through digital distribution as well, full sales of the title are some multiple of what is reflected in the retail sales. Starcraft II was the title that topped the best-seller list in July 2010, a testament to the power of the Blizzard brand in PC gaming.
To dig deeper into the new physical retail software performance this month, new launches generated 31% more dollars this May than they did last May, largely due to the success of Diablo III.

 NPD analyst Anita Frazier squares this slump by explaining, “YTD 2012, there have been 27% fewer new software title introductions into retail which we believe is a big part of the softness we’re seeing in May sales. A title obviously continues to see sales beyond its launch month, so there is a longer term impact from a narrower array of available new content.” She also mentions the excitement of new titles introduced at E3 that could boost sales later this year.

I found a video of Skylanders, which looks kinda fun. Not for me of course. Apparently there will even be a sequel this fall.


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