Recession Hammers Game Sales And Nintendo's Stock
This story was written by Tameka Kee.
So much for the theory that the gaming industry might be recession-proof. Video game hardware, software and accessories sales fell 17 percent year-over-year in the U.S., to $1.43 billion in March, according to market research firm NPD. The firm attributed the slump partly to the fact that Easter (surprisingly, a big holiday for game sales) fell in April this year, as opposed to March last year.
Console sales got hammered the most, with an 18 percent drop. "I thought we'd see higher unit sales on most platforms," said NPD analyst Anita Frazier, in a statement. "The Xbox 360 was the only platform to achieve a year-over-year unit sales increase." Xbox 360 sales were up 26 percent from March 2008; in contrast, PS3 sales fell 15 percent, while Wii sales fell 17 percent. And it's the first time that sales of Nintendo's family-friendly console slumped in 14 months. The news sent Nintendo shares down by nearly 7 percent on the Osaka Securities Exchange, per Bloomberg. Takagi Securities Co. analyst Shigeo Kikuchi told Bloomberg that the poor sales disappointed investors, since "Nintendo had been perceived as one of the winners."
It's just the latest sign of weakness for Nintendo: Japanese consumers bought more PS3s than Wiis for the first time last month, and experts are watching closely to see whether demand for the Wii (and its games) will start to diminish worldwide. This month's NPD stats aren't a good sign, and if the downward trend continues, Nintendo may be forced to cut the Wii's price to boost sales.
Photo Credit: massdistraction
By Tameka Kee