Video game retail sales declined massively in May 2013.
According to market research firm NPD, sales decreased 25.0% to
$386.3 million from $517.0 million reported in May 2012.
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Moreover, sales were significantly down from $495.2 million
reported in April and declined more than 50% from $992.5 million
reported in March.
Software sales plunged 31.0% year over year to $175.1 million in
May, considerably lower than $254.3 million reported in April and
$602.4 million reported in March.
Injustice: Gods Among Us
from Warner Bros. Interactive remained the top-selling game in
Activision Blizzard's (
Call of Duty: Black Ops 2
took the #2 spot, pushing
Dead Island: Riptide
from Deep Silver to #4.
Donkey Kong Country Returns
claimed the #3 spot, while the Wii U maker's
Luigi's Mansion: Dark Moon
got the #5 position.
NPD cited strong year-over-year comparisons (due to strong
, last years release from Activision), weak sales performance
from the existing games and lack of new releases from major
publishers such as Activision and
Electronic Arts (
, all of which hurt software sales.
Hardware sales fell 31.0% year over year to $96.0 million from
$139.0 million reported in May 2012. This was significantly lower
than $109.5 million reported in April and $221.6 million reported
sold just 114,000 units of Xbox 360 compared with 160,000 units
in the year-ago month. This was also much less than 130,000 units
sold in April and 261,000 units sold in March.
According to NPD, Nintendo's 3DS was the best selling video game
platform (including hardware and software) in the month. Nintendo
had three games in the top 10 list in May and 3DS game unit sales
jumped 60.0% from the year-ago month.
The huge decline in hardware unit sales primarily reflects a
matured console market. Moreover, customers postponed their
purchases as both
and Microsoft are slated to release their new console hardware by
the end of this year.
Accessories sales declined 6.0% year over year to $115.3 million,
primarily due to strong sales of Activision's "Skylanders" toys.
As per NPD, unit sales jumped 50.0%, while dollar sales surged
60.0% from the year-ago month.
According to NPD, gamers spent $787.0 million on video game
hardware and software (which includes used games and rentals of
$91.0 million, while digitally delivered content and
subscriptions amounted to $339.0 million) in May compared with
$802.0 million in Apr, 2013.
We expect video game sales to remain sluggish over the next few
months. Although we believe that the ongoing transition from the
physical to the digital platform will ultimately benefit the
video game industry (due to the cost effectiveness), lower priced
digital games have failed to offset the rapid decline in
higher-priced retail sales in recent times.
Moreover, declining software sales remain a concern. We believe
that the rapid adoption of free-to-play games will continue to
cannibalize retail software sales in 2013. Further, the highly
fragmented video game market will continue to witness increased
competitive pressures, which will hurt overall profitability.
However, we believe that the highly anticipated launch of new
hardware consoles from Microsoft and Sony will boost the sagging
video game retail sales market by the end of 2013.