Video Game Sales Slump For Second Month Straight

The launch of multiple high-end titles wasn't enough to reverse declining sales trends in June. That's the latest from the NPD group, who found sales in June 2011 fell 10 percent compared to June 2010. Sales were down in virtually every area, with games down 12 percent, console sales down nine percent, and accessories down 11 percent.

Nintendo's 3DS and the XBox 360 both grew month on month; with 143,000 and 507,000 units shipped for an increase of 47 percent and 88 percent respectively. Despite strong performance from both systems, software sales were weak:  LA Noire continued to lead sales charts at 419,000 copies, with Duke Nukem Forever selling 376,300 copies. As bad as the reviews have been, DNF is on track to inspire sequels. Infamous 2 (369,200), Lego Pirates of the Caribbean, (325K) and Legend of Zelda: Ocarina of Time (3DS, 283K) round out the top five games.

Despite Nintendo's reports of strong month-on-month sales increases for the 3DS, at least one analyst thinks the company's new 3DS is in for a tough road. Michael Pachter, an analyst with Wedbush Securities, told the LA Times that the 3DS was facing tough competition from smartphones: "The DS is losing share because of smartphones,” Pachter said. “Seventy percent of DS users are pre-teens. Within that population, 50% are perfectly happy with an iPhone or iPod Touch. So Nintendo has lost access to about half of that market."

We're not convinced. Not only are Nintendo's month-on-month figures fairly good, the company has multiple first-party game franchises it's historically used to keep handheld gamers hooked. That's not to say that the iPhone/iPod can't compete, but Nintendo is better than most at offering games that keep people wanting its handhelds, even in the face of competition. The other increasing criticism of NPD's data is that the firm doesn't track digital distribution, monthly subscriptions, used game sales, or social network gaming. While such sales represent an important (and growing) aspect of gaming, however, there's no evidence that gamers have suddenly shifted to online purchasing in a way that would account for the recent precipitious drops in sales. Whether due to uninspired game options, concerns over the economy, or fading interest in the Wii / PS3 Move, gamers are apparently holding off for now.

Despite these figures, the game industry is confident the results are little more than a blip. EA recently inked a deal to acquire Popcap games (of Plants vs. Zombies fame). EA will pay $650 million cash (and an additional $100 million in common stock) to acquire PopCap, which has seen its offerings grow tremendously in the past year thanks to a focus on social network gaming.
Tags:  Xbox 360, Nintendo, 3ds