US retail video game industry sales for July 2011
Analysis from NPD analyst, Anita Frazier
There is no getting around the fact that video game sales in the new physical retail channel suffered its lowest month since October 2006. Despite the very rough month, new physical retail sales are down just 4% year-to-date and based on seasonality trends observed over the last 10 years, which have been remarkably stable year-in, year-out, industry sales in this particular channel are poised to land in the flat to -2% range once the total year is completed.
Although there was a decrease in each video game category contributing to the whole, the category with the greatest dollar decline versus last year was console hardware, which was caused by a decrease in unit sales as the average selling price for console hardware was essentially flat to last year.
New physical retail sales of hardware, software and accessories accounted for 69% of the total consumer spend on the industry in Q1. We have measured some remarkable growth in other ways that consumers are acquiring content, including digital sales of full games and add-on content, mobile games, and social network gaming. Growth in these areas, combined with a flat to modest decline in new physical sales should result in 2011 showing growth over 2010.
Across hardware, software, and accessories, the platforms that contributed a greater portion of new physical retail dollar sales as compared to last year were the Xbox 360 and the PS3. The other platforms all declined in their contribution to sales compared to last July. This same statement holds for year-to-date sales as well.
Contributing to a tough comparison for August sales will be the delay of the release of Madden 2012 to 8/30 which falls into the September reporting period. Last year, Madden game sales at retail comprised 14% of the total new physical retail sales (across all categories) in August 2010, demonstrating how important this franchise is to the industry, and the impact it will have from moving from August to September this year.
Unit sales of all hardware platforms declined versus last July, and also declined on an average sales per week basis from June 2011. Combined unit sales of the 3DS and the DS were about flat to last year.
This was the first month that the Xbox 360 saw a year-over-year decline since December 2009. This is more of a reflection of robust sales last July, which was the biggest month for unit sales of the 360 in 2010 outside the holiday months (November and December). Last year's sales of the 360 hardware platform were driven by the introduction of the Kinect-ready slim form factor SKU.
New physical retail sales of software saw a 10% decline in unit sales versus last July. There were substantially fewer new releases this year, and the top selling games, with the exception of NCAA 12, didn't perform as well as last year's top sellers did. Looking across PC, console and portable game sales, 19 titles sold over 100K units last July, while this year, only 8 titles peaked 100K units.
Within new physical retail sales of console and portable games, July 2011 saw just 17 new releases (at the title level) compared to 29 last July. Setting NCAA aside, the average sales per new release this July were up 42% in units versus the average sales per new release in July 2010.
NCAA 12 was the best-selling title for the month, realizing a 15% increase in unit sales versus NCAA 11 in July 2010. The increase in sales could have been fueled by ardent football fans who have to wait a little longer to get their hands on Madden this year.
The Madden 2012 game will not release until August 30, so this year, August won't be "Madden Month" at retail (8/30 is in NPD's Sept. reporting period). Last August, Madden 2011 comprised 28% of new physical retail software sales so the impact of the shift to September is very real.