NEWS - Monday, July 19, 2010

June NPD Reactions

Microsoft was keen to point out that the launch of the slim Xbox 360 and price reductions to older models resulted in an 88 per cent hardware sales jump over last June.

“Retail demand for the new Xbox 360 250GB console remains high, and retailers continue to order as many units as Microsoft is able to supply,” the company said in a statement. “Collectively, Microsoft has also heard from retailers around the US that Kinect and its related games are a top priority this holiday.”

Two Xbox 360 games also made the monthly top ten bestsellers list, including first placed Red Dead Redemption, with consumers spending over $151 million on 360 titles last month, “driving Microsoft’s industry-leading software attach rate of 8.9”, the firm added.

Nintendo ‘s NPD statement noted that six of the month’s top selling games were for Wii or DS, and said that US sales of Super Mario Galaxy 2 have passed 1.1 million units.

The company also pointed out that Nintendo systems sold a combined 933,000 units in June, accounting for 50 per cent of all gaming hardware sold. Lifetime DS sales are approaching 42 million units in the US, with Wii closing in on 30 million.

“Between games like Super Mario Galaxy 2, the pioneering motion controls of the Wii system and the portable fun of Nintendo DS systems, Nintendo offers something for everyone,” said Cammie Dunaway, Nintendo of America’s executive VP of sales and marketing. “As we prepare to launch a remarkable lineup of new games in the second half of the year, we are grateful that consumers are supporting Nintendo consoles to continue their run as the nation’s most popular game systems.”

Sony said (via IGN) that US PS3 unit sales are up 85 per cent since June 2009 and 42 per cent since January 2010, presumably on a year-over-year basis. It added that there is no longer a PS3 shortage in the marketplace.

"Videogames are fuelling new innovation for the entire consumer entertainment category and today’s numbers are a testament to the big impact we’ll play this holiday," said SCEA’s director of corporate communications, Patrick Seybold.

“With a healthy flow of PS3s back in the channel, and eleven months of PS3’s consecutive growth behind us, we’re confident the PS3 will become the main entertainment hub for many new consumers this year and provide countless reasons to congregate in the living room."

Videogame industry analysts were more pessimistic, cutting through some of the platform holders’ PR spin.

Wedbush’s Michael Pachter said in a research note: “There is a lot going on in the videogame world, and much of it appears to be going in the wrong direction... We think that the large boost in June hardware sales, and much easier percentage (-26 per cent) and dollar ($437 million) comparisons could allow July software sales to approach flat, though another lacklustre release schedule for console games and weak sales momentum is likely to drive another down month.”

Interestingly, he said that the new slim Xbox 360 “accounted for only 40 per cent of Xbox 360 sales, with over 35 per cent of sales captured by discounted Arcade bundles and the balance captured by discounted older models... It is clear that the sales spike for the 360 was largely temporary, as clearance items accounted for around 60 per cent of total sales, and it is not clear that software attached heavily to these purchases.”

Pachter also said that Sony was the only console manufacturer to record software sales growth, “up a modest eight per cent year-over-year. Microsoft saw a software sales decline of 15 per cent on the Xbox 360, while Nintendo saw a decline of 19 per cent on the Wii".

Cowen & Company’s Doug Creutz said of June’s results: “Overall, there were few surprises in the data. Sentiment remains poor for the videogame publishers and with another weak month for NPD data, we continue to wait for potential near-term catalysts to emerge.”

Creutz thinks market declines over the remaining summer months are likely. “We expect July NPD sales to be down mid single digits year-over-year. We expect year-over-year software growth to resume in September with the release of Halo: Reach.”


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