Game Marketing Tips, Analysis, and News

Friday, July 15, 2011

June 2011 Retail Sales Sink

Yeah, it's about like that.
The packaged software business is following the path it's been on for the last three years... fading away. The NPD numbers for June are in, and they show an overall 10% drop compared to last year, from $1.15 billion last year to $1.03 billion this year. If you just look software, the numbers are even worse: It's a 12% drop, down to $469 million from the $513 million last year.

According to analyst Michael Pachter, some 75% of the drop can be attributed to the Wii software doing a fast fade at retail. Nothing like announcing a new console, especially one that's backwards compatible, to help boost software sales... or not.

Of course, the usual disclaimers abound that this does not count digital revenue of any kind; it's just discs at retail. Sure, but where does this leave companies who are getting the majority of their revenue from discs sold in retail stores? Trying to figure out how they can get out of that business.

This is the real problem awaiting new consoles. Even if gamers are willing to shell out $300 or $400 for new hardware, are they really willing to spend $60 on a boxed game that they have to drive to a retail store to get? Already you can find a lot of software for less to be downloaded on your console, though not the biggest titles.

What happens to the business when you can get an Google TV or Apple TV that has access to thousands of downloadable games at low prices? Sure, there's a lot of crap... but there are also games like Infinity Blade, and there will be many more of those, you can bet. We'll be seeing new TVs with the capability to access games built right into the TV. It's going to make the choice to drop $300 on a new console more difficult.

The real nail in the coffin comes when someone chooses to do a first-rate shooter on one of these platforms like Apple TV or Google TV, and there's a controller available that can do a good job with it. The pieces aren't all there yet, but you can see it coming.

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