Mass Uneffected?
In my last column, I focused on
projections for last month’s console hardware sales. While predicting the exact
ranking order can be a challenge, it’s getting pretty easy to assume sales
declines because of where we are in this console generation. The Wii is on its
way out. The Xbox 360 had a huge run for most of last year. The PlayStation 3 is
the only console to show anything close to flat year over year (YOY) sales
comparisons versus 2011.
I usually don’t dabble too much in software, primarily because NPD data is
usually much more restricted and selective. It’s also harder to accurately
analyze the industry based on NPD’s numbers because there isn’t yet an accurate
tracking method in place. We know that digital sales are trending higher, but
without specific data released by publishers - usually during earnings
statements and calls - we’re only seeing one side of the story.
Analyst firm PiperJaffray
has shared its software projections for last month with Gamasutra, and if
it’s close to accurate, April will be another in a series of poor software sales
months. The projection is for a decline in software sales of 25% versus a year
ago. This isn’t completely unexpected, since none of April’s releases were
comparable to Mortal Kombat or Portal 2, which hit stores in April of 2011.
What’s interesting to me is the ranking order that PiperJaffray is predicting,
courtesy of Gamasutra’s Matt Matthews:
01. Mass Effect 3 (X360, PS3, PC)
02. Prototype 2 (X360, PS3)
03. Xenoblade Chronicles (Wii)
04. The Witcher 2 (X360, PC)
05. Naruto Shippuden: Ultimate Ninja Storm
Generations (X360, PS3)
06. NBA 2K12
(X360, PS3, Wii, PC, PS2, PSP)
07. The
Elder Scrolls V: Skyrim (X360, PS3, PC)
08. Street Fighter x Tekken
(X360, PS3)
09. Mario Party 9 (Wii)
10. Call of Duty: Modern Warfare 3 (X360, PS3,
PC, Wii, DS)
Two other interesting projections were made. Combined sales of Mass Effect 3
are projected to total less than 500,000 units, and combined sales of Modern
Warfare 3 are projected to be right around 100,000 units.
Before analyzing this information, it’s worth mentioning that NPD data has
not yet been released. PiperJaffray’s projections are not necessarily going to
be proven correct; however, given how close we’re getting to the release of the
data and that the information has been shared with the press, I think it’s worth
going over.
The first thing that leaps out at me is the presumably strong sales of
Xenoblade Chronicles. The game wasn’t available everywhere, so moving more than
100,000 units is pretty impressive to me (if the data verifies). It’s not
necessarily shocking that Xenoblade may have outsold The Witcher 2, but I think
it raises a few eyebrows. If Xenoblade did this well, credit Nintendo for
choosing to ship in a month that was generally quiet.
The projected strength of Prototype 2 is also a bit of a surprise, especially
considering the relatively late release of the game in the reporting period.
It’s good news for Activision, although not being able to outrank a game that
was nearly two months old can be a point of criticism. Prototype 2 is basically
this year’s Portal 2, in terms of release importance. I don’t think it sold
635,000 copies, though, so it’s another negative comparison to last year and
boosts confidence of a significant YOY decline once again.
The final observation about the ranking chart is that Kinect Star Wars isn’t
on it. This is despite an early-month release and having the Star Wars name
attached. If PiperJaffray is correct, Kinect Star Wars would have sold less than
100,000 copies in April, which would be a tremendous disappointment. While I’m
not completely sold on the idea that Kinect Star Wars sold that poorly, seeing
GameStop selling the Kinect Star Wars bundle at a $50 discount after only a
month is a peculiar coincidence. It’s now going to be interesting to watch the
NPD Top 10 Software list to see if the game cratered, as PiperJaffray has
suggested.
I do think that we should be prepared for another NPD report filled with
disappointing news. Spin will be applied to try and lessen the blow of
significant declines, but this is becoming a trend. Perhaps new consoles will
win back consumers and fuel spending once again, but that’s far from a
guarantee. PiperJaffray posits that the console gaming sector is hemorrhaging
consumers already:
“Gamers are exiting the market for alternative forms of entertainment and
leisure activities. Consumers are increasingly demanding interactive experiences
that are social, mobile, and free to play. These activities include photo/video
sharing and social gaming, all of which are activities that the current consoles
and new handhelds do not support effectively.”
Even if the bubble has not burst in the console gaming sector, it’s leaking
air at a steady rate. It’s not a doomsday scenario by any means, but a
corrective pattern is taking shape which will more than likely see declines in
consumer numbers and in revenue in the near term and possibly continuing into
the first phases of the next console generation. There will still be some
successes here and there, but the console gaming boom is quite possibly at an
end.
We’ll see what we can learn from the NPD data when it’s released next week.
