Video game retail sales continued to decline in Mar 2013.
According to market research firm NPD, sales decreased 10.0% to
$992.5 million from $1.1 billion reported in Mar 2012. However,
sales were much better than $810.0 million reported in Feb and
$834.7 million reported in Jan, 2013.
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Software sales climbed 2.0% year over year to $602.4 million in
March. This was much better than $369.9 million reported in
February and $373.1 million reported in January. The
year-over-year growth was primarily driven by strong performance
from new games, which sold 40% more units than new launches in
Take-Two Interactive (
was the top-selling game in the month, pushing February
Dead Space 3
Electronic Arts (
, a Zacks Rank #3 (Hold) stock, out of the top 10 list.
Currently, Take-Two has a Zacks Rank #3 (Hold).
from Square Enix took the #2 spot, while
Gears of War: Judgment
was placed at #3. Currently, Microsoft has a Zacks Rank #3
Hardware sales fell 32.0% year over year to $221.6 million from
$244.2 million reported in February. However, March hardware
sales were better than $205.0 million reported in January.
Microsoft's Xbox 360 was again the top-selling console. It sold
261,000 units in March compared with 302,000 units sold in
February. This was also much less than 281,000 units sold in
January. On a year-over-year basis, Xbox unit sales declined 30%.
As per NPD data, Nintendo's 3DS handheld sales grew 9.0% year
over year last month. According to NPD, total US video game sales
were $1.9 billion in Mar, 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), low priced
digital games have failed to offset the rapid decline of
high-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 Nintendo (released in Nov 2012), Microsoft
will boost the sagging video game retail sales market by the end