Video Games

Video Game Sales Rebound in September, but Barely

Chris Morris|Special to

The good news: After six consecutive months of negative numbers, the video game industry finally had a month that topped 2008’s sales figures. The bad news: It only did so by the skin of its teeth.

Sales of video game software were up 5 percent in September, compared to a year ago — the first improvement on the 2008 numbers since March. Wall Street analysts had expected double-digit increases.

Even with big titles such as “Halo 3: ODST” and “The Beatles: Rock Band” leading the way, sales jumped only to $649 million, according to the NPD Group — a mere $31 million improvement.

Michael Pachter, managing director of equity research at Wedbush Securities, had forecast sales of $750 million in September.

More disheartening was the fact that price cuts by all three manufacturers had less of a positive effect than expected. Hardware sales were down 6 percent from the 2008 numbers.

One winner was Sony's PS3. The decision to lower the price by $100 made the system significantly more attractive to buyers. For the first time since its 2006 launch, the PS3 topped the hardware sales charts.

Sony sold nearly 482,000 units in September, a 134 percent increase over August and more than double the number sold a year ago. (September had more selling days than August, making the month-over-month increase slightly larger than normal.) The victory wasn’t as pronounced as many were expecting, though, as price cuts by Microsoft and Nintendo spurred sales of the Xbox 360 and Wii as well.

Wii sales came in at just shy of 463,000 units — a 67 percent increase over the previous month, but a 30 percent drop from September 2008. Microsoft sold 353,000 Xbox 360s, a 64 percent increase over August and just slightly above the 2008 comparables.

Overall, the Nintendo DS led hardware sales, as it has for the past six months, selling over 524,000 units.

Among software, Microsoft’s “Halo 3: ODST” led sales, as expected. The game, which explored a new part of the “Halo” universe and did not feature its usual cast of characters, sold more than 1.5 million copies. That makes it the sixth best-selling launch in the industry’s history.

Sales of “ODST” were nearly triple that of the second best-selling title — Electronic Arts’ “Madden,” which sold over 536,000 copies on the Xbox 360 and PlayStation 3.

In the closely watched battle of the bands, it was a split decision. “The Beatles: Rock Band” topped Activision’s “Guitar Hero” in dollar sales (earning more than $460 million), but was able to do this only due to its retail price premium, which was 130 percent above that of its competition.

The competition was good for the beleaguered music genre, though.

“The sales of Rock Band and Guitar Hero led the music/dance genre to a 72 percent dollar sales increase over September 2008,” says NPD analyst Anita Frazier.

Year to date, the industry is still $1.5 billion — 13 percent — behind last year’s pace.

Despite this month’s slight increase, pessimism still overshadows the industry. Sentiment for October sales is gloomy and the hopes of the industry managing to break even this year are evaporating quickly.

While the holiday sales period is still looming, there’s only one real title that analysts feel has true blockbuster potential: Activision’s “Modern Warfare 2,” expected in November.

The game could potentially be one of the biggest sellers in the industry’s history — but few, if any, believe it will be enough to turn around what’s shaping up to be a very disappointing year.