Peter Skerritt Avatar Posted on 5/17/2013 by Peter Skerritt

April sales rained down 42% hardware and 17% software losses YOY, with total dollars spent down a gloomy 25% overall.

Written by Peter Skerritt (editor-at-large)

May Flowers Needed

Iíve seen better days
Been the star of many plays
Iíve seen better days
And the bottom drops out

ďBetter DaysĒ, Citizen King (1999)


Those lyrics pretty much sum up the NPD sales data for April 2013. Overall, retail industry sales dollars were down 25% to $495.2 million for the month, driven by a plunge in hardware sales by more than 42% versus the prior year. Physical retail software sales were off by 17% to $267.8 million and accessories were down 19% to $131.4 million. Consumers spent $135.2 million less at retail for the period.

Analyst Note: Armchair Analysis uses data supplied by NPD Group as well as reliably sourced data and extrapolations from NeoGAF and the participants in the monthly NPD Sales thread. Thanks to Liam Callahan and the team at NPD, to James Brightman at, and to Michael Pachter at Wedbush Securities.

Microsoft can boast about having the best-selling hardware platform for the month of April, but thatís a rather hollow accolade when looking at the raw data. Only 130,000 Xbox 360 units sold in the month of April, which is a steep decline of 45% YOY. I had thought somewhere around 195,000 units would sell, given debuts of Injustice and Dead Island: Riptide and residual sales of Bioshock Infinite. Wedbush Securitiesí Michael Pachter was even more bullish, projecting 205,000 units. Nobody expected such a precipitous drop. One potential reason may be the news that broke in April about Microsoft readying its follow-up to the Xbox 360 for a reveal in May. That news instantly aged the 360 hardware and altered it from a decent buy to more of a wait-and-see scenario.

Thereís also the possibility of saturation for the Xbox 360 hardware, which is getting ready to celebrate its eighth birthday later this year. Many who want the 360 already have it, while those who donít are still driven off by a stubborn price point that should be lower by this time in the consoleís lifespan. With a relatively light release schedule for the platform through mid-August, there wonít be a lot of push to buy new hardware unless Microsoft lowers the price point. Weíll see if that happens.

The 3DS finished second, just barely ahead of the PlayStation 3. The 3D-powered handheld was unable to sustain its positive YOY momentum that was seen last month, and thatís despite two of the ten best-selling software titles for April were 3DS games (Luigiís Mansion: Dark Moon and Lego City Undercover: The Chase Begins). While a more positive outlook for Q3 and Q4 is expected, driven by more software releases for the period, it is a bit disappointing that the 3DS could not manage a second straight month of gains when the comp target was only 125,000 units.

I do think that brighter times are ahead for the 3DS... just not immediately so.

The PlayStation 3 managed to move just over 100,000 units in April. The plunge in sales here isnít as easy to explain as the one we saw for the Xbox 360. Aprilís biggest sellers were multiplatform games, including Injustice: Gods Among Us and Dead Island: Riptide, so the PS3 wasnít excluded from any of them. There also werenít any residual effects of exclusives for the PS3 released last month in God of War: Ascension and MLB 13: The Show (although MLB 13 did hang on at #10 on the Top 10 list). Donít expect much change for May, but June should perk up a little thanks to the release of The Last of Us. As with the Xbox 360, a price cut really does make sense here. Thereís a significant software library already in place and a lower price point makes the PS3 more inviting to consumers, even if itís not necessarily a ďgames firstĒ device for the home.

The built-in Blu-ray player and access to Netflix without an extra service subscription would make it a viable purchase for a wider range of consumers - but that $250 price point may be about $50 too high, and pack-ins really donít matter. inFamous and Gran Turismo 5? Not really a deal. Sorry.

The Nintendo DS and Nintendo Wii were fourth and fifth on the hardware chart for the month of April. Yes, people are still buying them. Theyíre not terribly expensive and each of the platforms has a treasure trove of games available at decent prices. I do understand the continued calls for Nintendo to kill these platforms, but remember: Nintendo is still making money by selling them. Itís not forward-looking revenue, but it is revenue all the same. That said, the writing is on the wall for these platforms to gradually be phased out. One extrapolation put Wii unit sales at fewer than 50,000 units. That shows how far the once-mighty has indeed fallen.

Wii U is stuck in the sixth spot, and with unit sales extrapolated to between 35,000 and 40,000 units, itís another tough month for Nintendoís new platform. Iíve talked repeatedly about what I think is wrong with the Wii U, and Nintendo looks to be trying to do something about it. The proposed fixes arenít going to get here right away, but there will be online broadcasts to promote upcoming products for the platform and a dedicated event for retailers and analysts at E3 to show us what the plan is going to be. I want to be convinced that Nintendo is going to turn the Wii U around. Nobody wants it to fail. The road to redemption will be a challenging one, as third-party publishers continue to show general signs of no confidence in the platform and itís up to Nintendo to either woo them back or to convince consumers that Wii U will be fine without third-party support. E3 for Nintendo will be, in my opinion, very important to get the message across.

Finally, we have the Vita. Sources indicate that not even 20,000 units of the Vita sold in April. Compare that to Japan, where the Vita comes close to or beats that number in a weekís time. Unlike the Wii U, which is being pronounced dead by many despite only being on the market for 6 months, Vita has been around for 14 months and no real improvement has been seen. Iím not sure what Sonyís strategy will be to resuscitate the Vita here in the United States. A price drop is but one step; much more software is needed and that software needs to have more mass-market appeal. Letís not kid ourselves, either; indie games arenít going to sway more than a small segment of the gaming consumer demographic to drop money on a Vita. The scope of software needs to be wider.

Perhaps Sony is confident that the PlayStation 4 and its ties to Vita will turn things around, but will consumers want to drop another $200-$250 on top of the asking price for the new PlayStation? Right now, I think the answer to that question is a rather emphatic ďnoĒ. For the short term at least, expect the Vita to remain in the cellar of the hardware rankings while clinging to relevance.

These poor numbers caught me by surprise, and I donít think that Iím alone. May will probably show more declines, especially in software thanks to high comps last year driven by Diablo III and Max Payne 3. I expect this pattern of YOY decline to continue for the rest of the quarter, and possibly into the third quarter as well. There is hope later on with strong software slates for most platforms and the introduction of new hardware to the market could drive sales higher in Q4. I caution against reading too much into Aprilís collapse. I donít believe that consumers are running away from console video games as much as thereís a sense of patience as the new-generation hardware platforms take their places on a grand stage and convince us of which one to buy. While I do strongly believe that this console generation will show signs of contraction with less revenue and fewer units sold, I do not believe that the console sector is in danger of collapse. Itís a transitional period, and as such, we must expect a bumpy ride at times in terms of sales and trends.

For more in-depth analysis and observations, feel free to visit my Armchair Analysis blog. Also, be sure to check in here during and after E3 for additional articles and first-hand experience as Iíll be in Los Angeles for the big event.

NPDís Top Hardware Sales in April (Units Sold)

01. Xbox 360 (130,000 units, -45% YOY)
02. Nintendo 3DS (>100,000 units, lower than April 2012)
03. Playstation 3 (>100,000 units, significantly lower than April 2012)
04. Nintendo DS (extrapolated to ~60,000 units)
05. Nintendo Wii (extrapolated to <50,000 units)
06. Nintendo Wii U (extrapolated to between 33,000-39,000 units)
07. PlayStation Vita (sources indicate <20,000 units)

NPDís Top Ten Software Sales in April (Platforms by sales amount):

01. Injustice: Gods Among Us (360, PS3, Wii U)
02. Dead Island: Riptide (360, PS3, PC)
03. BioShock Infinite (360, PS3, PC)
04. Call of Duty: Black Ops II (360, PS3, Wii U, PC)
05. Defiance (360, PS3, PC)
06. Luigiís Mansion: Dark Moon (3DS)
07. NBA 2K13 (360, PS3, Wii U, Wii, PSP, PC)
08. Skylanders Giants (Wii U, 360, PS3, 3DS, Wii )
09. Lego City Undercover: The Chase Begins (3DS)
10. MLB 13: The Show (PS3, Vita)

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