May Game Retail Figures Slump

[Karloff]

May Game Retail Figures Slump

People aren't buying, and recent sales data says why.

May's financial stats contain bad news for the game industry. Retail slumped by 28%, compared to the same period last year, and that means over $202 million just got wiped off the bottom line. By far the biggest contributor to the slump was hardware sales, which show a decline of 39% when compared to last May's figures. In part, that can be attributed to people hanging on to old consoles as they wait for the next generation to come out. However, the more worrying statistic has to do with game sales. Not that many new titles came out, and that meant consumers didn't bother to buy.

According to analyst Anita Frazier, there were 27% fewer new titles released up to May 2012, over the same period the previous year. That really hurt retail overall and was one of the biggest contributors, after ageing hardware, to the latest financial dump. "A title obviously continues to see sales beyond its launch month," she went on to say, "so there is a longer term impact from a narrower array of available new content."

This also means that software retail sales failed to hit the estimates previously announced by financial analysts. Wedbush Securities, for example, bet that software would hit the $350 million mark, when in fact it only managed to get as far as $335.2 million. Software saw a 16% dip in its May figures, compared to 2011.

It's not all gloom and despair. We've seen Diablo 3, Max Payne and Ghost Recon so far, which is bound to perk things up a bit in future stats. Plus, as Frazier points out, there are other numbers to be considered. Microtransactions, mobile apps, subscriptions - these draw in huge numbers each month and, of course, there's still a used and rental games market out there, much though some game companies may wish it wasn't. These extra stats make up about 40% of the total consumer spend on games. Says Frazier, "We would estimate the total consumer spend in May to be $1.17 billion," thanks in no small part to the mobile apps and microtransactions crowd.

So it's time to be thankful for the Angry Birds and Triple Towns of this world; it seems they're helping keep the industry afloat.

Source: Gamasutra [http://gamasutra.com/view/news/172136/Aging_consoles_infrequent_releases_hurt_US_retail_game_sales_in_May.php]

Image: Bing [http://www.bing.com/?FORM=Z9FD1]

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[RvLeshrac]

So they needed sales data to tell them that if they don't make new games, people won't buy them?

If a Manager doesn't have some numbers or a chart on his desk, they have no idea what's happening. I'm surprised they can dress themselves without a graph showing the steps of getting dressed as related to one another over time, and the relative efficiency of performing each step in a different sequence.

 

[Emiscary]

So they needed sales data to tell them that if they don't make new games, people won't buy them?

Don't worry, they've got a plan. They'll just keep doing exactly what they're doing now until the end of time, and it'll never stop working. They can milk the same cliched franchises forever by tacking on more and more microtransactions and splitting up content piecemeal to be sold as DLC. And gamers will never *ever* get fed up with it.

Right?

 

[Kargathia]

I'd say "keeping the industry afloat" is adding quite a bit of superfluous drama: even considering this dip in gross revenue, they're still haemorrhaging cash.

 

[gmaverick019_v1legacy]

*ahem*

they seem to be forgetting about steam's summer sale.

when that hits...

 

[medv4380]

This is a consequence of the Tsunami last year. The developers practically shutdown to deal with the crisis. There was going to be a supply bottle neck from that sooner or later.

 

[itsthesheppy]

I think the industry could stand to be a little smaller, a little more hungry, and work with a little less capital. Some of my favorite games of the last three or four years came from small studios and worked off tiny budgets.

 

[WaysideMaze]

Retail slumped by 28%, and the number of games released was 27% less than last year.

There's a pattern here...

 

[Doclector]

Games retail failing!? Don't worry, I'm bored over the holidays, and I have a tremendous ability to chuck money around like an enemy in a legend of zelda game when that happens! I even bought alone in the dark once!

 

[1337mokro]

Seriously why are these people even allowed NEAR statistics? Keep these "annalists" away from any actual numbers that might hurt their brains. There was no money "lost" because there was no product made that would warrant a loss due to poor sales. There just was nothing to buy.

There is no "ageing" hardware crunch because guess what most of that new hardware is bought by former customers who had the red ring of death or due to some other accident screwed up their PS3. The only people that actually KNOW that the next console generation is coming soon, are gamers, who already OWN a fucking console, PC, whatever.

Not to mention that you don't have the numbers from the biggest online retailer, Steam, which is good for what, over 50% of that market? So yeah, flawed data. Allot of those "brick and mortar" sales probably went online as well.

To me it just sounds as a "DLC and microtransactions are the only way to keep a stable flow of income..hur dur" bullshit. Idiots.

 

[Tradjus]

I think that we're due for a pretty big contraction in the new games market overall, not just because it's about to be summer, but because no one is going to spend millions developing a new game for systems that are sun-setting. Most of the games that are being pushed back to 2013 are evidence enough of that, they're changing development too the new consoles.

 

[Podunk]

There were 27% fewer new titles released up to May 2012... So retail slumped by 28%... Seems pretty straightforward to me.

 

[Bvenged]

This could also been seen as an increase in consumers gaining confidence in themselves and a realisation for the control we have over the market and industry.

Maybe game Y isn't too much different from the previous game X, as it has been for the past 3 years, and Gamer Joe Public has finally come to terms that big changes and new IP's are only really going to happen when the old recyclable game model stops selling well: That £40 for a "new" tweak of last-years game just doesn't cut it any more, and thus is not getting bought.

This also means publishers will have to make bigger risks in order to diversify games to get them selling again, which means more original games and possible loyalties to the original fanbase for sequential games!!!!

I'm a hopeful thinker.

 

[gigastar]

So they needed sales data to tell them that if they don't make new games, people won't buy them?

Thats the thing about management teams, they only understand the language of bar- and line-graphs.

This is a consequence of the Tsunami last year. The developers practically shutdown to deal with the crisis. There was going to be a supply bottle neck from that sooner or later.

Ok, firstly that was only for Japanese developers. They got over it.

Secondly almost all of the games that i know were in development at the time by the Japanese publishers are out. This doesnt count games that arent released outside of Japan.

The real reason why were not getting alot of new stuff at the moment is because theres no holiday event that can be used to push sales. In other words, the gaming industry has just hit the dry season...

Hope youve been stocking up on long RPGs...

 

[Eruanno]

So the major issue here is that they haven't released something people want to spend money on. And then people don't spend any money on the things that aren't there to spend money on. Surprise!

 

[bigdork]

So are people actually buying fewer games, or just cheaper games? With the console generation 5 years old, I frequently buy back-catalog games for $30 or less. I'm getting all the games I can play, but I can see how the suits would be disappointed that I'm not paying $60.

 

[Atmos Duality]

Retail slumped by 28%, and the number of games released was 27% less than last year.

There's a pattern here...

It's almost as though...decreasing the selection in gaming decreases the demand.
What a shocking development!

In all seriousness, this is to be expected when publishers have tried as hard as they could to force as much of the AAA gaming market to comply with the console model...then the consoles become outdated and the hardware market saturated.

Worse for them: the Big Three continue to pussyfoot around making half-hearted commitments (if any) to supporting/creating new hardware.

Result: A decline in sales.

Spoiler: My Other Thoughts

"Maybe PC can save us!"

I don't think it will.
Not unless the AAA Publishers start announcing more PC games that aren't ports.
If they had such intentions I suspect they would have announced them at E3.

PC will continue to "tread water" as it has for ~7 years now; but I concede that it stands to become more relevant if either Sony or Microsoft doesn't announce a new console.

"But Steam--!"

Even Steam is (in part) subject to this since a significant number of their AAA offerings are still just ports. Steam has stability due to the booming Indie Game scene and PC's small trove of niche' markets (RTS), but said scene isn't on the level of the entirety of AAA gaming.
Not yet.

"But Diablo 3--!"

One game does not solve the problem of Diversity in Offerings, and that is what is causing sales to slump. You will see a spike in sales from D3, but the long-term problem will remain in spite of D3's success.

(and this assumes D3 continues to be as successful as it was on launch; which for once, might actually be questionable due to the negative backlash I see online.

For once, I have to question if said backlash represents a larger proportion of the "Vocal Minority" than I've come to expect. If nothing else, it's hard to ignore overt action like South Korea completely shitting on Blizzard for D3's poor service.)

Come back a year later; everything may look much brighter for the Publishers assuming...

1)..Sony or Microsoft announce the ACTUAL next-gen consoles (and let Nintendo continue acting as gaming's equivalent of Fisher Price)
2)..That more of said publishers haven't merged or otherwise gone out of business.

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Nope. This is the only post I'm making.
I filled out the captcha and it still slings this shit at me. Annoying.

 

[Kroxile]

Shock and awe!

They didn't blame it on used games and piracy, but on something real instead!

 

[2733]

I'm betting the lackluster hardware sales can be attributed to the fact that this far into this gen, anyone who wants hardware already has it. I'm surprised that diablo 3 didn't pull the game sales numbers up a good bit. That means to me that sale of everything that wasn't Diablo sold even more poorly than it appears.

 

[SL33TBL1ND]

I'm really surprised that retail is still going with the huge number of digital outlets for games right now.