--August videogame sales plunged 34% from year before
--Electronic Arts CFO says "Madden 12" selling 10% higher than
last year's game
--Biggest titles set for release around holiday shopping
season
By Dan Gallagher
A relatively dismal sales report for the month of August points
to strong hopes among videogame makers that customers will turn out
for big releases in the final months of the year.
Late Thursday, NPD Group reported that sales of videogame
software in the U.S. plunged by 34% in August compared with the
same month last year. The drop was largely expected, as the month
saw a paltry schedule of new releases, along with the fact that
more gamers are migrating to new channels online that are not
picked up in traditional retail surveys.
That puts more pressure on the industry to make a strong showing
in the fall -- given that retail sales still account for the bulk
of big-ticket game purchases.
"Software sales are down 5% year to date, but expectations are
for flat to slightly up figures for the year, with more than half
of the industry's sales in the last four months," Todd Mitchell of
Brean Murray wrote in a note to clients on Friday.
Doug Creutz of Cowen & Co. predicted that September sales
would see "low single-digit" growth in software sales with higher
growth in the fourth quarter, when the holiday shopping season
kicks in.
Game stocks were largely in the red on Friday, following the
release of the NPD data. Leading the decline was Nintendo Co.
(NTDOY, 7974.OK), whose U.S.-listed shares fell nearly 3% to $21,
down more than 40% for the year-to-date as the Japanese game maker
has grappled with a strong slowdown in demand for its Wii console
as well as the disappointing launch of its 3DS handheld device.
On Thursday, Nintendo said the 3DS racked up unit sales of
235,000 for the month -- nearly 80% of which took place after the
company slashed the price on the device by 40% following a
weaker-than-expected launch in March.
The next challenge for the device will be to capitalize on new
software releases planned for the year. The company is launching
"StarFox 64 3D" this weekend as well as new titles with the popular
Mario and Pokemon characters later in the season, with "Mario Kart
7" expected for early December.
A major factor in the weak August sales was a shift in the
release date of "Madden NFL 12" from Electronic Arts (ERTS). The
top-selling football franchise typically debuts earlier in the
month, but EA did not release the game until Aug. 30, which will
put the game into NPD's September sales period.
In an investor presentation on Friday, EA Chief Financial
Officer Eric Brown said "Madden NFL 12" is selling about 10% higher
than its comparable period last year.
EA has benefited from its growing focus on the newer social and
mobile gaming platforms. The company's "The Sims Social" has become
the third most popular game on Facebook, next to "CityVille" and
"FarmVille" from Zynga in terms of average daily users, according
to Appdata.
Analysts widely expect industry sales to begin to improve in
September. In addition to "Madden," big releases slated for the
month include "Resistance 3" from Sony Corp. (SNE, 6758.TO),
exclusive for the company's PlayStation 3 console, and "Gears of
War 3" from Epic Games, made exclusively for the Xbox 360 console
from Microsoft (MSFT).
The biggest titles for the year will be pegged closer to the
holiday shopping season, including EA's "Battlefield 3" and "Call
of Duty: Modern Warfare 3" from Activision Blizzard (ATVI), "Saints
Row: The Third" from THQ (THQI) and "Assassin's Creed Revelations"
from Ubisoft Entertainment SA (UBI.FR). The French game publisher
is also expected to launch new titles for the Kinect motion-gaming
platform by Microsoft such as "Just Dance 3."
-By Dan Gallagher; 415-439-6400; AskNewswires@dowjones.com