The video games industry suffered another decline this month as compared to last October. This is the third best October on record, behind October 2007 and October 2008.
Based on typical industry seasonality, the industry is on track to generate full-year revenues in the range of $20-$21B in the U.S., which would put it just a bit below last year's sales of $21.3B.
The continued economic turmoil, and in particular the troubling unemployment rate, is undoubtedly impacting industry sales. Our latest Economy Tracker indicated that although consumers' general opinion about the economy is improving, their outlook on their own personal situation is worsening. If consumers' personal outlook continues to erode, they could very well be much more conservative with their holiday shopping this year.
Across all categories, the Xbox 360 platform contributed the greatest portion of total industry sales, representing 27% of total industry sales for the month. The PS3 was a close second at 26%, an 8 point improvement over last October.
With the excitement already being generated by Call of Duty: Modern Warfare 2, and the incredible buzz around upcoming titles, New Super Mario Bros. Wii, and Assassin's Creed 2, November is poised to be a strong month for the industry.
Hardware sales were down 17% in units for the month, with the Wii and the Xbox 360 decreasing the most compared to October 2008. Compared to last month, which was a five-week month as compared to four weeks this month, Wii, PSP and NDS sales increased on an average sales per week basis, while the PS3 and Xbox 360 declined.
On a year-to-date basis, only the Xbox 360 and the NDS have realized unit sales increases over the same time frame last year. While overall portable hardware unit sales are down, dollar sales are up thanks to an increase in the average selling price of portable hardware generated by the higher price points of the new portable systems and bundles.
Year-to-date, the hardware category has experienced the sharpest decline in the industry, with unit sales down 10% compared to the same time period last year. Recent price cuts helped spur a one to two-month increase in unit sales, and this month's Wii sales reflect that boost, but the other platforms have not sustained the sales momentum post price reduction. It will be difficult to discern the impact of the price cut into November and December just because those are always the two best months for the industry anyway, and we'd expect to see a sizeable lift in hardware unit sales as a result of seasonality.
The PS3 exclusive game Uncharted 2: Among Thieves, captured the top spot for software sales this month, selling 537K units.
Software sales decreased 18% for the month, but only 11% on a units basis. The average retail price of software decreased 8%, which led to the greater dollar sales decline.
Wii Fit Plus came in second for the month. Roughly half the sales were generated by the bundled SKU, which points to a lot of newcomers to the franchise.
The top game for the month across all platforms was NBA 2K10, at 575K units. It was a great launch for the game, outselling last year's NBA 2K9 by 60% in its launch month. Sales on both the Xbox 360 and PS3 platforms improved substantially over last year.
The music/dance genre saw big declines this month compared to last year. The genre generated $53 million in sales as compared to $137 million last year. Both Rock Band: Beatles, and Guitar Hero 5 have the potential to be good gifting items for the holidays, so we should expect to see an uptick in sales over the next two months.
On a unit sales basis, accessories sales declined the least of any category this month. The Wii Remote and Nunchuk controllers were the top two items for the month in both unit and dollar sales.
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