by Doug Desjardins
Video-game retailers have been in a downward spiral all year and even though analysts are forecasting an increase in overall holiday spending, game sales aren’t expected to be in that mix.
Research firm NPD Group reported that video game sales dropped 8 percent in September, marking the sixth consecutive month that sales have declined. Total sales for the first nine months of the year are down 8.4 percent, thanks to the lingering recession and a lack of new hit games. And those poor sales come on the heels of an unprecedented 10-percent drop in sales in 2009.
Console sales have been even worse and are down 13 percent for the year, a combination that doesn’t have analysts counting on a holiday rebound. “What we’re seeing is a continuation of a sluggish console market,” said Colin Sebastian, an analyst with Lazard Capital Markets. “And that’s the trend we should expect the rest of the year.”
The problems of top game publisher Electronic Arts reflect the general malaise of the industry. The publisher of hit franchises like Rock Band and Madden NFL reported a loss of $201 million for its quarter ended Sept. 30 following a loss of $391 million during the same period in 2009. The company attributed the smaller loss to cost-cutting measures implemented this year and not improved sales. 
The only bright spots for Electronic Arts were digital sales, which rose 25 percent to $161 million during its most recent quarter, and new games for the Kinect and Move motion-capture add-ons to the Xbox 360 and PlayStation 3, which include new installments of its Harry Potter and Tiger Woods franchises.
Video game publisher THQ is also having a difficult year. The publisher of franchises like WWE Smackdown reported a 24-percent decline in second-quarter sales that it attributed to a lack of new titles.
“This year, we had no new releases,” said THQ chief executive Brian Farrell. “It was our rebuilding year and we didn’t ship anything.”
THQ’s problem is something troubling the entire industry: a lack of new, innovative titles to drive sales and generate buzz. The biggest launch of the year so far has been the newest installment in the old but reliable Halo franchise Halo: Reach, which has sold more than 3 million copies. But that could be outdone by the newly-released Call of Duty: Black Ops from Activision, which generated a record number of pre-orders for game retailer GameStop prior to its launch on Nov. 8.
Even new motion-control hardware for the Sony PlayStation and Microsoft Xbox won’t have much of an impact this year. Move and Kinect are already in stores, but with only a handful of games available for each system, they’re not likely to produce a bump in sales until 2011.
Resources
NPD: Behind the Numbers September 2010
Video Game Sales Fall for Sixth Consecutive Month
Electronic Arts Post Narrower Loss
THQ Sales Fall on Light Game Lineup
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