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Pachter predicts 34% YOY decline in NPD’s June sales report

Tuesday, 10th July 2012 03:19 GMT By Brenna Hillier

When the NPD Group releases its June sales report later this week, Michael Pachter isn’t banking on good news.

The Wedbush Morgan analyst expects sales to reach just $305 million, down 34 % on June 2011, according to a note sent to investors, as reported by Gamespot.

Pachter blamed a “lackluster release lineup”, with Pokemon Conquest and Lego Batman 2: DC Super Heroes like to top the charts, ahead of the slow burning Ghost Recon: Future Soldier. June releases Spec Ops: The Line and Lollipop Chainsaw are expected to post modest performances, and Pachter doesn’t believe Max Payne 3 has picked up, either.

“In this unprecedented eighth year of the console cycle, we believe there are few new intellectual properties to reinvigorate interest in the games sector/ Consumers have been offered a never-ending series of sequels, and have been offered fewer choices each year for the last several years, with the result being waning interest in new software purchases and an unprecedented three years of software sales declines,” Pachter said.

“The poster children for limiting consumer choice are Activision, Electronic Arts and THQ, with each company offering 50 percent as many titles as they offered several years ago, with only one new intellectual property launched among the three companies over the last year.”

NPD sales figures have dropped year-on-year each month since November.

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23 Comments

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  1. OlderGamer

    Patcher needs to get out of my head, almost like he was stealing my very own words.

    Never the less, he is right.

    Perhaps 10 year life cycles aren’t such a great idea after all?

    #1 2 years ago
  2. Ireland Michael

    @1 Has everyone just completely forgotten that we are currently in the deepest troughs of a worldwide economic depression?

    #2 2 years ago
  3. OlderGamer

    Thing is, there is no denying he is right. I have been saying the same darn things for a couple of years now.

    I think there is a lot of money to be made in the industry still. Look at the 3DS sales. Heck compare 3ds vs vita sales. One sells very well setting records along the way, and the other one trickles off of shelves.

    No doubt that the economic climate matters, but understanding what people want and more importantly what people will buy matters too, more now then ever. Platform holders better be damn careful when they put out thier next gen systems. Price means everything. Combine that with lack of anything fresh and new, they could split the audiance and find that games move very slowly.

    I called it a few years back, I said the industry could well be heading for a 1980s style crash. I don’t that it has to end up there, certianly nothing is ever written in stone, but many key ingrediants are in the mix at this point.

    Peoples disposable income ratios are droping, hardware and software are expensive(DLC) makes it more so, the market is over saturated with sameness, and so on.

    I think gaming will be fine, but the dedicated living room set top box playing 60usd+ AAA big budget games, loaded with “extra” DLC, on premium online subscription, could be numbered. At the very lest it needs a rethink, I don’t believe it is sustainable anymore. And I think we continue to see that with the ongoing decline in sales.

    But, some will say that DudeBro 7 game still sold awesome! Of course. But before the Halos, CoDs, or other high profile, highly marketed franchise games hit the skids…other smaller and medium games fall off. And we are seing that now too(those are where the decline is). More and more core gaming means omp shooter. All part of the process, imo. I think that is why MS pushes Kinect so damn hard. As well as other services and apps. I don’t think they believe that core demographics can carry a console the way it once did.

    #3 2 years ago
  4. Phoenixblight

    Its YoY if you haven’t noticed there haven’t been any games released other than Diablo 3 which is not going to show up on NPD and Max Payne 3. NPD is also a very rough estimate since it doesn’t track digital sales.

    Also MS and Sony still plan on doing 10 year term for next Gen they have proved to be very profitable for them both unlike the previous generations.

    #4 2 years ago
  5. OlderGamer

    On a console, digital game sales are a much smaller % then some people give them credit for. DLC, on the other hand…if it for the right franchise…

    On PC digital game sales are huge.

    But this conversation is mostly a console one.

    “In this unprecedented eighth year of the console cycle, we believe there are few new intellectual properties to reinvigorate interest in the games sector/ Consumers have been offered a never-ending series of sequels, and have been offered fewer choices each year for the last several years, with the result being waning interest in new software purchases and an unprecedented three years of software sales declines,” Pachter said.”

    As far as your less games being released theroy, PB. Exactly. There are going to be less game choices if things don’t change, lest on consoles. That is part of the problem. Things have gotten so out of hand that a big pub doesn’t want 25 games in their stable each year, instead they want 5 games a year. And they want those franchises to sell 5Xs as much. (just using abstract numbers for ilistrative purposes). Thats part of the too much cost to make a game side of things. Dev costs are too high. So they stick with, and push the same franchises, year after year.

    I think, in truth, right now a lot of pubs are building their games for new systems. It makes sense that this whole year could be a wash out. But I think there a lot of warning signs on the wall too.

    #5 2 years ago
  6. fearmonkey

    As someone that lived through the video game crash, i dom’t want to go through it again. However it’s a very different market than it was then.

    It’s been a mistake for Sony and MS to wait so long on releasing new hardware. Publishers got too comfortable releasing sequels instead of taking chances on new IP, and so we have indies filling the void with PC games and games for the mobile devices we have now.

    The global economy meltdown hasnt hurt the sales of tablet devices like the IPad and the constant influx of new powerful smartphones. The problem we have now is games are priced very high and people dont chances as much on them, to take chances we need exciting new hardware and IP, and publishers hardly ever release a ton of new IP except at the begining of a cycle.

    Digital sales do well but most wait for cost cutting sales except for the big titles like Diablo 3. Most PC gamers dont buy a ton of new titles at full release price, console gamers do, but have been doing it less as this generation goes on.

    There is nothing wrong with the generations lasting 10 years, but more like the PS1 and PS2 situation, where both were an option at the same time for awhile.

    #6 2 years ago
  7. DrDamn

    @3
    “Look at 3DS Sales”

    Which are suffering too.

    http://www.vg247.com/2012/07/04/3ds-sales-currently-weak-in-europe-and-na-nintendo-president/

    “hardware and software are expensive”

    Disagree – at least in that software is cheaper than ever console wise, and that’s part of the problem for devs/publishers. The old model was all games cost $60/£40. They get sold at retail. Now the methods of selling, the cost of games, the expectations of the consumers – all changing and the industry is readjusting. Plus as pointed out @2 we are in a bit of a recession.

    AAA titles will still be pushed out at the $60/£40 price point, use a lot of retail. With DLC and whatever else they can use to get the costs back. The vast majority of everything else *needs* to move to other models. The B and C titles, niche releases etc. Too many are trying to stay in the same space as AAAs and they are getting done over by the value offered elsewhere. Rethink, rework your business models. XBLA, PSN etc.

    The problem then is this is becoming a saturated market where getting your product seen is difficult and requires a change marketing. The flip side for the consumer is that this market is also hugely diverse and innovative.

    #7 2 years ago
  8. AHA-Lambda

    ““The poster children for limiting consumer choice are Activision, Electronic Arts and THQ, with each company offering 50 percent as many titles as they offered several years ago, with only one new intellectual property launched among the three companies over the last year.””

    Wow… just wow… can I ask what the new IP was? Was it Kingdoms of Amalur (although that is EA partners)?

    @2 – as much as that is true the gaming consumer has proven that they will put their money where their mouth is on certain big products; especially when you consider $100-150 limited editions and $50 season passes. The AAA market can be very successful on a title to title basis looking at games like CoD, Battlefield, Skyrim, Gears, Uncharted etc. but it has become too top heavy and I’d say comparisons can be made between AAA as a whole and the MMO market.

    The problem is that for $60 many people seem to only be willing to bank on a few select things. I would say a $40 pricing tier would help but the B-tier budget game has been marginalised and eroded this gen leaving just the indie or the blockbuster. I hope with an increasing focus on DD and F2P next gen maybe we can see a return on the B-tier. And maybe then we can see more games like vanquish and they might actually make money this time =/

    #8 2 years ago
  9. DrDamn

    @8
    “Just the indie” – the problem for the B tier being that just the indie are looking comparable and having just as much content/fun for a much cheaper price. The B tier need to accept they aren’t AAA and budget that from the start. Focus on what makes a digital game release successful.

    #9 2 years ago
  10. AHA-Lambda

    I would say that’s unfair, I believe that there is a place for the B-tier game. As such, if viable, it would give some of the more niche AAA games we have seen this gen a more realistic shot at success. Vanquish in particular is one I want to mention because it flopped badly and lost money but was a really great game, that kind of game couldn’t be done on an indie scale. B-tier however with some concessions? Vanquish could have been better for it.

    #10 2 years ago
  11. GrimRita

    Some of you are missing another component – the actual industry. Maybe gamers are becoming disillusioned with some of the latest releases? Shorter games, costing more money maybe gamers are becoming more selective with what they purchase.

    As touched on earlier, the gaming market has changed. With the arrival of smart phones and social media(facebook games), its another gateway for income and offering a different kind of experience.

    With budgets for making games growing for some reason(PR/Marketing over spend probably), its about time the industry looked at the costs involved instead of bitching for next gen consoles. They cant even afford to create on the current gen.

    #11 2 years ago
  12. DrDamn

    @10
    I think we may have different ideas of what indie entails. You talked about just the Indie and the blockbuster. For me the Indie therefore would have to include a lot of the more “premium” PSN/XBLA titles. There is where I think something like Vanquish could sit. Prices in the range £10-£20-ish.

    #12 2 years ago
  13. AHA-Lambda

    I’ve got more of the idea of something like a £20-30 range rather than £10-20. The £10-20 is already basically here, even if we tend to sit at the bottom end of that scale. The £20-30 range is something that only steam has bothered to do and I’d like to see XBLA and PSN experiment with.

    #13 2 years ago
  14. lama

    i havent bought a single game this year so far. none of the released games held much interest for me. im tired of the same boring stuff every month.

    #14 2 years ago
  15. DrDamn

    @13
    Vita PSN is certainly already in that space too. One of the things Sony said about the Vita was we want lots of different price points. Not just budget and full, and this is how it has panned out so far too. Hopefully they take that in to the PS4 too.

    If it goes £20-£30 then it has to be just digital. In the retail space perception will be of an inferior product at that price – silly but true. In digital it will be perceived as premium and that is correct for this sort of title.

    #15 2 years ago
  16. DrDamn

    @14
    What about XBLA or PSN – plenty of variety and new stuff there.

    #16 2 years ago
  17. AHA-Lambda

    @15 – oh yeah I’m forgetting vita, well that’s a good indicator hopefully of things to come like you say :)

    #17 2 years ago
  18. GrimRita

    @15 not so true. Look how many people on here wait for the Steam sales(for example) before buying a game? Doesnt mean that the game is inferior.

    Price is paying a big part in how we all probably purchase our games. I’ve only purchased a few games at max price this year. If theres a game I am not sure about, I will probably wait for it to drop in price first.

    Last major purchase was Guild Wars 2(DE) @ £65 – lot of money and now I am having second thoughts as I was so pumped for this but after the recent betas, have come away flat! The industry needs a shake up and stop blaming external sources for the lack of sales. Gamers are bored of the same ol’ shit.

    #18 2 years ago
  19. AHA-Lambda

    @18 – no i do agree with DrDamn on this one, not necessarily because of price but advertising, mindshare and hype play a very important part with a game’s release and a lower priced game wouldn’t have the same marketing push/budget as a AAA one would. This is partly why the B-tier has eroded, lower priced games can not sit comfortably on the same shelves as a skyrim or CoD can.

    Having cheaper prices for AAA games through sales is one thing, this is another.

    #19 2 years ago
  20. SplatteredHouse

    @3: The middle-ground, arguably gaming’s heartland, continues to either erode in effectiveness, or migrate away from the eyes of these analysts reports in to digital where the coverage isn’t as widely, authoritatively tracked.

    ““The poster children for limiting consumer choice are Activision, Electronic Arts and THQ, with each company offering 50 percent as many titles as they offered several years ago, with only one new intellectual property launched among the three companies over the last year.”

    The birds are coming home to roost, now that the people who advise investors are pointing out observations to their clients that were previously made in cautionary tone by forum posters at least a year before.

    #20 2 years ago
  21. DrDamn

    @18
    I’m talking about something different, not the price you want to pay for a game but perception of a release. Launch price, day one. If you do a retail release and day one you sell your product next to other new products at half the price then the perception is that what you are selling is somehow inferior. We are talking about people who haven’t been following the game, don’t know how well it may have been reviewed etc.

    #21 2 years ago
  22. OlderGamer

    Ok a couple of things:

    http://en.wikipedia.org/wiki/List_of_best-selling_game_consoles#Handheld_game_consoles

    3DS has sold over 17 million units.

    Vita has sold 1.8 million units.

    I know one has been out longer then the other and all of that stuff. But look at rate of current sales. 3DS sells very well. What Iwata was basicly doing in that shareholder meeting(in your link) was apologizing to investers because the handheld hasn’t sold as much in the west as they projected(what VG247 was doing in that link was trying to sensationalize and twist it). But in the west handhelds have to compete against iOS and Driod and so on. Vita sales stink in the west too.

    The 3DS system launched with too high price tag(and that fits right into our discusion here in this thread) and it wouldn’t sell. They lowered the price point and it moved. A loud example and warning for MS and Sony toward the next gen.

    Price matters a lot.

    I think economy is huge, but I think gamers have proven that they spend money on games even in tough times.

    Digital sales, consoles:

    Sales are hard to track, but numbers are out there. Castle Crashers is long regaurded as one of the top selling xbla/psn titles. As of end 2011 it sold combined across both platform 2.7 million units. And 2.5 million of them being on xbla.

    http://en.wikipedia.org/wiki/Castle_Crashers

    While not terrible by any stretch, but even you added on another 500k units to bring it up to date(and that might be generious) it has still sold a life time of 3.3 million. And that is one of, if not the, top selling digital games on a console. those types of numbers clearly can’t be blamed for a decline in console retail sales. So it isn’t a case of number shifting away from boxed products to digital ones. Not on a console. Not like on a PC.

    There are other reasons and other catilysts.

    Now for the arguement that games somehow costs less today then they did 15 years ago…throw it out the window, too many veriables. 15 years ago, the world looked very different, I was playing on a PSx and Sega Saturn. The games were priced between 30usd and 50usd. I remember buying Gaurdian Hereos brand new for 29.99, and Dragon Force for 39.99. And those games came complete in the box, no content held back for DLC. No Elite/Premium pass crap. No online subscription fees required either.

    Todays AAA, boxed games average 60usd, and most have a % of the games content locked away for further pricing in the form of DLC. For example if I wanted to own the complete Madden NFL game for PSx it costs me 40usd or 50usd. Today the complete Madden NFL costs me 90usd for my PS360.

    Is it a better game? Sure, the same way that Gaurdian Hereos was a better game then Kings Dragon on SNES. Or Dragon Force bested Conflict on NES.

    Heck compare MVC2, that I bought for my Dreamcast. It had 56 fighters included right out of the box, no dlc. And then look at MVC3, it is a turn off. Game companies come across as greddy bastards that are more interested in stealing our money with DLC then earning it with value and quality. I know there is more to the equation of course.

    I think mostly, people are just bored. Only so many times gamers will buy the same game. And I think the industry needs to find better ways of keeping costs down, esp on entery level experiences(like f2p games). Somehow second hand sales need to be stoped(Game, Gamestop, etc have been leeching profits from the people that actualy make the products) for a long time. Lots of pieces make the whole puzzle.

    I think a quick fix and shot in the arm will be a new generation of hardware, if the prices are kept low eneough. But really without a rethink, next gen will just end up like this one fours years from now.

    #22 2 years ago
  23. DrDamn

    @22
    First off the Vita is irrelevant to my point, I was simply putting forward that economy is a factor. The 3DS numbers in the US/Europe support this. The units sold are split more or less equally between the three regions and the US and Europe are much bigger markets so should be much higher than the Japanese numbers – unless you can give another reason for the difference?

    Not even sure what your point is with Castle Crashers? What does the isolated sales figures of one title tell you about the big picture?

    “Now for the arguement that games somehow costs less today then they did 15 years ago…throw it out the window, too many veriables.”

    But apparently you can argue the other way round with a few examples? PSOne on release had RRP of games at £50 here. *As* the generation went on retail prices dropped, but even budget/classics releases were £20. It’s been the same with the PS3/360. On release RRP £50. As the generation has gone on retail and online prices have dropped. Ignore DLC, compare what you get out of the box now with what you got out of the box then and games are in *general* bigger, more fully featured, better value. That’s before you even consider the value offered by XBLA, PSN, PS+ which weren’t available then and a small matter of inflation.

    #23 2 years ago