May 2011 Game Sales Lowest in 5 Years

Looks like Luigi glanced at Nintendo's sales figures for May.

While the traditional game industry was whooping it up at E3, trying to convince everybody that things are gonna be great, the sales figures for May came in. Overall retail sales for the game industry in May dropped 14% to $743.1 million, the lowest monthly sales total since October 2006. Ouch.

To make it even worse, Microsoft saw sales of the Xbox 360 jump 39%, and Sony saw PS3 and PSP sales increase, though NPD is no longer breaking out the numbers... as I said before, the news was getting a little harsh each month so NPD has backed off from being so precise. Still, they did say that overall hardware sales dropped over 5% for the month. So if Microsoft saw big hardware sales, and Sony saw hardware sales go up for both its platforms, that means Nintendo had a really, really bad month. June numbers should tell us what impact the Wii price cut had... but it doesn't look all that positive right now.

Software sales really took it on the chin, with a 19% drop. Analysts blamed a light release schedule, and perhaps some dollars were shifted to the Call of Duty map pack which of course isn't tracked by NPD or anybody else (except for Activision, and they ain't talkin').

So aside from the uplift the industry got from the nice report last month, we're back to the steady decline of retail software sales. The fact that hardware continues to do well could be due to several factors. One is the increasing use of game consoles to watch Netflix, which is certainly the biggest time spent on consoles in my household. Sony said at E3 that 30% of Netflix traffic comes through the PS3, which is interesting... I'd bet more than that comes through the Xbox 360 given the disparity in installed base.

Another factor is probably the increased game play time of individual titles through multiplayer online play. If you spent $60 on Call of Duty, why by another game when you can play online with new people all the time? Refresh things with a new map pack and you've kept yourself from heading to the game store and dropping $60 on some new title that may or may not be as much fun.

Finally, the indie titles available online for consoles must be having some effect. Those titles can sell in the hundreds of thousands... and that's dollars not appearing on retail sales charts.

Total spending on games appears to be on the rise, but it's certainly shifting away from retail stores and from traditional console titles with no DLC. Sadly, this appears to be leading to even less innovation on major console releases at retail; just look at the E3 announcements and all you see are sequels. Original titles are as rare as an understated press release.