The video game industry "got a harsh slap in the face Monday," says Chris Morris at Yahoo! Games. According to new data released by tracking firm NPD, games sales in May dropped to $375.8 million, a 19 percent drop from May 2010. That makes May 2011 the industry's worst month since October 2006. The steep decline surprised analysts who'd forecasted at least "relatively flat" sales thanks to a price cut for Nintendo's Wii console. Here, four possible culprits behind the unexpected flop:
1. A "paltry" lineup of new releases
The May disappointment "really is about a light new release schedule as compared to last year," says NPD analyst Anita Frazier, as quoted by CNBC. Just 42 new titles were released last month, compared to 58 in May 2010, and 72 in May 2009.
2. No Red Dead Redemption
Last year's May sales numbers would have been hard to match, because they reflected the release of Red Dead Redemption, which sold 1.5 million copies that month, and went on to be named Game of the Year. The newly released L.A. Noire was the top-selling game last month, but it only came out mid-month, and its 900,000 sales fell "short of the lofty expectations for the highly anticipated and well-reviewed title," says Christine Lusey at SodaHead. The rest of the short list of new choices "failed to entice consumers," says Ian Sherr of Dow Jones.
3. Aging, pricey gaming consoles
Sales growth for games "will remain elusive" until sales of consoles get a boost, says analyst Michael Pachter of Wedbush Securities, as quoted by CNBC. Nintendo's new 3DS handheld system has had a "weak debut," and the new lower price for Wii didn't help either. A true industry rebound would require that "Microsoft and Sony cut the price of their consoles," too.
4. Incomplete data
Online video game sales are growing rapidly, but the NPD data "only represent physical sales, not digital downloads," says Lusey at SodaHead. For example, the downloadable release of a new map pack for Call of Duty: Black Ops isn't reflected in the totals. That add-on "undoubtedly" drew "some dollars that might have been spent on new physical content" from stores, says NPD's Frazier, as quoted by VentureBeat.
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