After thirteen consecutive months of decline, video game sales
increased in Jan 2013, thanks to an additional week. According to
market research firm NPD, sales increased 9.0% year over year to
$834.7 million last month.
The NPD group follows the National Retail Federation's
calendar, which adds a week every six or seven years at the time
of reporting sales. On a regular basis (four week month), sales
would have declined 13% from the year-ago month.
Software sales climbed 1% (over the five week period) year
over year to $373.1 million. On a regular basis, sales would have
declined 19% from Jan 2012 levels.
Call of Duty: Black Ops II
continued to top the game sales chart in Jan 2013. Currently,
Activision has a Zacks Rank #3 (Hold).
Far Cry 3 was #2
, which pushed December runner-up
Just Dance 4
from the same developer to #3.
Take-Two Interactive's (
was placed at #4 and
Electronic Arts (
Madden NFL 13
at #5. Currently, Take-Two has a Zacks Rank #1 (Strong Buy),
while EA has a Zacks Rank #4 (Sell).
Hardware sales increased 4.0% (over the five week period) year
over year to $205.0 million. On a regular basis, sales would have
declined 17% from Jan 2012.
Xbox 360 was again the top-selling console with 281,000 units
sold in January. Currently, Microsoft has a Zacks Rank #3
Accessories reported strong year-over-year growth as sales
surged 30% over the five week month. On a regular basis, sales
would have increased 4.0% from the year-ago quarter. The strong
growth was primarily driven by higher demand for Activision's
According to NPD, consumers spent approximately $141.0 million
on used games and rentals and $382.0 million toward mobile games
and downloadable content.
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
However, we believe that the highly anticipated launch of new
hardware consoles from Microsoft and Sony (expected in 2013) will
boost the sagging video game retail sales market going
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