From IndustryGamers.com:
The NPD Group’s October video game sales data is expected to be released on November 12, and Broadpoint AmTech analyst Ben Schachter does not expect it to be pretty. Total industry sales were essentially flat in September (software up just 5%), and Schachter is anticipating October 2009 software dollar sales to show a double-digit decline. He points out that there’s a tough comparison with October 2008, which was up 35% on new hits like Fable 2, Fallout 3, Guitar Hero World Tour, and the continued strength of Wii Fit and Mario Kart.
Besides the tough comp, Schachter notes that the industry is seeing overall sales slumping thanks to three areas: Wii weakness, casual games competition, and music genre fatigue. For the four publishers Broadpoint covers (Activision, EA, Ubisoft and THQ), Schachter said the “sentiment for the group is as bad as we have seen it in 10 years.”
Schachter summarized the three problem areas as follows:
- Wii Weakness: Since few publishers outside of Nintendo significantly benefited from the Wii boom, few will be significantly hurt as the platform stalls.
- Casual Games Competition: Again, few publishers significantly benefited from casual (though Ubisoft was the non-Nintendo leader for casual female gamers on the DS).
- Music Games Fatigue: The genre is past its prime. While it still accounts for 9% of YTD 2009 sales, it is down 40% vs. 2008. ATVI is obviously the most impacted by this (as ERTS is only a distributor for Rock Band).
Schachter said that excluding Wii and Music titles, industry software sales are actually down 9% y/y, versus down 12% overall (including everything). “While there are clearly problems in the industry, we still think well managed companies with hits can make money. … Our point is that publishers with core-gamer hits can do well even though the industry is hurting,” he said, adding that November should be much better for the industry, especially with Call of Duty: Modern Warfare 2 potentially breaking all records.
Talk about moving the goal posts around.