You saw our August NPD data, right? It said that August was a slow month, and may point to a slowing economy finally having an effect on the games industry. Analysts expected sales gains of 20 to 25 percent, but only saw about half of that last month.
CNN Money says that nearly all of the major videogame publishers' shares were in the red on Friday. Even GameStop's shares were down 5 percent.
"So much for strength in video games," Deutsche Bank analyst Jeetil Patel said Friday. "After starting off with roughly 40% to 50% growth in the first six months, August video game sales came back down to reality with a hard dose of consumer spending woes."
"Shares of video game companies have been under pressure for some time due to just such fears," Mitchell wrote in a report. "We think that they will remain under pressure in the near term as investors adjust their expectations downward."
Our friendly neighborhood analyst Michael Pachter isn't worried, saying that "the combined effects of the hurricanes, political conventions and Olympics distracted many consumers." Good points.
I'm not worried, either. While both console and game sales are down, we're walking into a holiday season unlike any other for games. I know my "want list" is huge, and I'm sure your list is, too.
Are you worried that the industry is headed downward?
Contest:
12:58 PM on 09.12.2008
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The new Madden was released, and surely made oodles of cash. Too Human came out to mixed reviews. Disgaea 3 was released, but is a niche title. Another Mario baseball game...hooray? New Tiger Woods...
Those are the only big-title games that I saw on a release list of for August.
Analysts can think predict all they want, but they should look at what is being released and if the titles are highly-anticipated by gamers or are just more shovelware...Kidz Sports: Crazy Mini Golf? Margot’s Word Brain? Pajama Sam: Don’t Fear the Dark? Hannah Montana: Spotlight World Tour?
Wheeee?
I'm going out right now to pick up some more textbooks, then it's off to get NHL 09 for the PS3 :D.
Nintendo "expanded" the market to include casual gamers and thus the industry experienced rapid growth in a short time. Rapid growth in any industry always leads to two things: slowing growth due to size (see GE, whose size - like EA - means that 50% year-over-year growth is exceedingly difficult, if not impossible) and a marked slowdown due to fatigue (people who have any inclination to play videogames probably have a system by now). I personally know a few people who bought a Wii but played out Wii Sports and/or Rayman and/or Tiger Woods and no longer are interested in playing for a while. I notice these cycles in my own playing habits.
The videogame industry as a whole is now going through the consolidation phase of the industry cycle which is marked by a lack of innovation but a realization of economies of scale (i.e. games being developed on fewer engines).
The financial industry has tightened credit terms, which means that someone is less likely to buy a system or game as an impulse purchase.
And of course, August is a slow month anyway.
So basically there is a convergence of the following:
*Growing overall size = less growth rate
*Product Fatigue
*Consolidation phase of industry cycle
*Consumer spending being down
*Tougher credit card terms
*Seasonality of sales
OT, no. The summer game drought is ending, the weather is turning, and there's a crapload of new releases lined up for the holiday season. Why worry?
I'm doing what I can to help the cause, are you?
August definitely had a lot of crappy games, how did publishers expect to sell those sh*t? They're all saving great games for holidays, of course (I hope), and that's when sales will go to really high.
Wow, I can be an analyst too!
were any good games released in august - no.
next week is unleashed and october - december have a good amount of awesomeness in them, so we will see what happens then.
People need to think chicken and egg- when there is nothing new that people want to buy- they won't buy it. If you ratchet down titles (activision) because of it people won't buy even more.
august saw mercenaries 2 (that i am not so interested in) and not much else on the platforms- psp had... tiger woods golf and cake mania (wow. how exciting)- it seems for once that the best releases were on DS, lock's quest is pretty awesome and viva pinata portable is pretty nice too.