Peter Skerritt Avatar Posted on 8/14/2012 by Peter Skerritt

The game industry saw 32% hardware and 23% software declines from last year as the NPD sales data give even less reason to celebrate.

Written by Peter Skerritt (editor-at-large)

Needs Pops Desperately

For an eighth straight month, sales in the video game sector showed negative YOY comparisons. Weakness was driven by the same issues that have been plaguing this sector throughout 2012. Hardware sales are stagnant as generational fatigue and stagnantly high price points combined with a weak software release slate. This weak software release slate for July also led to a significant number of older games returning to the sales charts, aside from expected strength from NCAA Football 13. In fact, if it wasnít for strength in Accessories sales - which were up 8% YOY - Julyís results could have been a lot worse.

As it stands, July of 2012 showed a more than 20% decline versus the same period a year ago, or a loss of about $138 million. Hardware sales were off by 32% and software sales fell by 23% for the period. The 8% gain in accessories was fueled by continued strength in the sales of Skylanders toys, which generated over $11 million in revenue for the month alone. So far for 2012, industry revenue is down by more than 25%, and this negative trend is slated to persist throughout the rest of the 2012 calendar year.

Microsoft continued its run at the top of the hardware sales charts, moving 203,000 Xbox 360 units for the month of July. Thatís a more than 26% decline from last year and a 21% drop from last month. Itís been an impressive run for Microsoft, especially given that there hasnít been a price drop in quite some time and that saturation hasnít seemed to slow sales down enough to drop unit sales behind the PlayStation 3. With Microsoftís current (and expanded) $100 subsidized sales plan for the 360, it remains to be seen when or if Microsoft will act to slash hardware pricing. It can be argued that the company doesnít have to act, given the continued position of sales dominance for the platform. Even if sales arenít where analysts may want them to be, nobodyís faring any better... so the status quo isnít really a bad option. Perhaps Q4 sales will be fueled by bundles once again this year. Weíll see soon enough.

While Sony continued its silence when it comes to NPD sales data, we do know that the PlayStation 3 finished in second place on the hardware sales chart. As has been the case for most of 2012, the PlayStation 3 continued to be a relatively steady YOY performer; in fact, its -4.3% comparison was second only to the 3DS. Sales were less than 150,000 units. News of a new PlayStation 3 hardware revision continues to evolve, and with that comes the possibility of a price cut for the platform. It would be the second in two years. Sonyís first-party software slate for the rest of 2012 looks moderate at best, so itís hard to say how much of an effect that a price cut would have moving forward, especially since multiplatform momentum continues to rest with Microsoft and Halo 4 likely trumps anything that Sony has to offer in Q4. I still believe that the PlayStation 3 platform has room for growth, but I donít know that it happens.

The 3DS experienced a huge YOY jump, shooting up some 44% from its dismal July 2011 numbers. Whatís interesting to me, though, is the fact that legacy DS hardware caught up to 3DS hardware sales for the month... so much so that the two platforms literally sold the same number of units. While I do expect sales for the 3DS in August to rise - thanks to Kingdom Hearts 3D, New Super Mario Bros. 2, and the release of the 3DS XL - I expect legacy DS hardware to stand firm for the next few months thanks to the releases of Pokťmon Black & White 2, which are not 3DS-specific. Obviously, itís a win-win for Nintendo when consumers buy either legacy DS or newer 3DS hardware, but the question continues to be raised about how deep that 3DS adoption will go. Iíd like to see more strength for the newer platform, but at least sales continue to track far better than the struggling Vita. At the very least, Nintendo is winning that battle with little to no resistance. (Iíll talk about the Vita shortly.)

Wii unit sales for July were the lowest in the platformís history in the United States, failing to reach 70,000 sold for the first time. Itís not a surprise as new software gets more and more scarce and news of the upcoming Wii U begins to expand. Itíll be interesting to see how Nintendo plays out its hand with Wii moving forward. Iím still surprised that Nintendo has not yet dropped the Wii price a bit further to try and wring out a few more decent months before the Wii U begins to throw dirt on its grave. I still maintain that a $100 price point would be low enough to stimulate one more round of sales for the platform, which still has a number of decent titles available for the budget-conscious consumer.

Vita sales were also the lowest that theyíve been since the platform was released in February. Sales sank below the 50,000 mark for the month of July, averaging less than 12,000 units sold per week. Sony Computer Entertainment America President and CEO Jack Tretton was quoted in a GamesIndustry interview the day after NPD data was released, saying that Vita sales levels are ďacceptableĒ. Thatís troubling. Despite a strong launch lineup, sales of Vita hardware havenít yet touched 700,000 units - and 33% of those were sold in the first two weeks. Sony may be professing patience as more games will eventually be coming, but consumers really donít care. Competing with 3DS, smartphones, and tablets will be be an even more uphill battle for Sony as we move deeper into 2012.

Touching briefly on software, it was no surprise that NCAA Football 2013 took the top spot on the sales charts. That was the only major console title released in July, and itís interesting to note that physical sales of the game trended lower than last yearís game. Comic heroes performed well for the month, taking second and third place on the combined sales chart and capturing five of the top ten best-selling individual SKUs. The rest of the combined top ten were releases from 2011 - or even 2010, in the case of Call of Duty: Black Ops. This is a by-product of a weak release period, and itís worth pointing out that the only two individual SKUs that sold more than 100,000 units for the month were the Xbox 360 and PlayStation 3 versions of NCAA Football 13. Nothing else cleared 90,000 units for the month, and this helps to explain the YOY shortfall that I pointed out earlier.

Here are your hardware sales rankings and Top Ten Combined SKUs for the month of July:

NPDís Top Hardware Sales in July

01. Microsoft Xbox 360 (203,000 units, -26% YOY)
02. Sony PlayStation 3 (less than 150,000 units, about -4% YOY)
T3. Nintendo DS Family (over 130,000 units, -57% YOY)
T3. Nintendo 3DS (over 130,000 units, +44% YOY)
05. Nintendo Wii (less than 70,000 units, -63% YOY)
06. PlayStation Vita (less than 50,000 units, N/A YOY)

NPDís Top Ten Combined Software Sales in July

01. NCAA Football 13 (360, PS3)
02. LEGO Batman 2: DC Super Heroes (Wii, 360, NDS, PS3, 3DS, PSV, PC)
03. The Amazing Spider-Man (360, PS3, 3DS, NDS, Wii)
04. Just Dance 3 (Wii, 360, PS3)
05. Batman: Arkham City (360, PS3, PC)
06. Call of Duty: Black Ops (360, PS3, DS, Wii, PC)
07. Assassinís Creed: Revelations (360, PS3, PC)
08. NBA 2K12 (360, PS3, Wii, PSP, PS2, PC)
09. Call of Duty: Modern Warfare 3 (360, PS3, Wii, PC)
10. Dead Island (360, PS3, PC)

This next-gen COD style mech adventure is one best experienced with equipment that can make it shine, even if the underlying product is still kind of dull.
April 14, 2014Read More!
A great example of a 'clone' of popular genre games done right, especially those unavailable on platforms they make the most sense on.
April 14, 2014Read More!
A streamlined version of 999 that doffs the need for convoluted gameplay, presenting the same events and chilling twists that make the game accessible to anyone. In short, it's awesome.
April 14, 2014Read More!
While commendable to see a darker take on familiar archetypes, fans may want to stick with a different strategy-RPG that doesn't try so hard to be edgy.
April 14, 2014Read More!
A new act, class, loot system and more await fans in the first expansion to Blizzardís Diablo 3.
April 8, 2014Read More!
See More From Games...
Pure silliness, wrapped around a history lesson thatís largely apolitical; stars persons and places more recognizable than the first book.
April 7, 2014Read More!
Stories written between 2003 and 2010 that are bagatelles; not bad, but not memorable; not the Waldrop collection to start with, but buy it anyway.
April 3, 2014Read More!
An exemplary vision spanning 192 pages, with plenty of juicy information about Respawnís wondrous new world to sate even the most jaded of gamers.
March 21, 2014Read More!
Even if its source material wasn't to your liking, thereís plenty to enjoy about this accompanying tome, especially if you can appreciate great art when you see it.
March 21, 2014Read More!
We chat with Cosplay Deviants' Troy Doerner about his new book Undressing the Art of Playing Dress Up.
March 19, 2014Read More!
See More From Culture...
Katsuhiro Otomo and three other directors serve up a wild anthology of anime shorts in the wonderful and bizarre collection that is Short Peace.
April 18, 2014Read More!
Lacks the nostalgic pulp magazine atmosphere that made its predecessor so much fun, but as a Marvel film it gets the job done.
April 4, 2014Read More!
More audacious than volume one, mostly because of von Trierís willingness to delve into the darker, often unexplored recesses of the mind.
April 4, 2014Read More!
In spite of Berry's incredible performance(s), the film cannot escape its controversial subject matter or its melodramatic plot.
April 4, 2014Read More!
Disney returns its Peter Pan spin off series to the high seas in The Pirate Fairy.
April 4, 2014Read More!
See More From Movies...