Video game hardware sales in June 2009 came in just ahead market expectations. Total hardware units (excluding PS2) sold were 1.697 million, 9.6% better than the market's expectation for 1.55 million units sold. However, beating these expectations should be met with limited enthusiasm.
Anita Frazier of NPD Group comments: "The video games industry realized a significant decline when compared to June 2008, the fourth consecutive month of year-over-year declines. The first half of the year has been tough largely due to comparisons against a stellar first half performance last year, but still, this level of decline is certainly going to cause some pain and reflection in the industry... This month saw the greatest year-over-year monthly decline since September 2000 when the industry declined 41%."
The simExchange prediction market had correctly forecasted this downturn, with actual sales coming in at $625.8M, just 9.64% better than the expected $616.2M.
Frazier continues that the economy is taking its toll on the video game industry: "This is one of the first months where I think the impact of the economy is clearly reflected in the sales numbers. While the aggregate of content may not be as strong as what we saw in the first half of last year, and while the consumer base willing to spend dollars on hardware at the current price points may be thinning, the size of the decliine could also point to consumers deferring limited discretionary spending until a big event (must-have new title, hardware price cut) compels them to spend."
The one bright spot for console sales, according to Frazier: "The Xbox 360 is the only platform to have realized a unit sales increase over last June. YTD, both the 360 and NDS have generated an increase in unit sales. Although many track month-to-month sales changes, comparisons to May must take into account that June is a five-week reporting month while May spanned four weeks."
An interesting note is that this is the first month since Wii Play has not appeared on the NPD Group's Top 10 sellers since the game was released 29 months ago.
Frazier points out: "Tiger Woods PGA Tour 2010 had a great debut at retail, nearly doubling the units sold in the first month at market of the previous best-two launches: PGA Tour '05 and '07, which sold 272K units each in their respective launch months . No doubt a combination of moving the release date of the game out of "Madden Month" into June where golf was heavily televised due to the U.S. Open as well as well-received new game features and attributes helped contribute to this success." This latest installment's strong sales were exactly in line with the simExchange's expectations.
The following tables compare market expectations on the simExchange and actual results as reported by the NPD Group.
|Title||Actual units||Expected units||% From Expected|
|Total Hardware Units (excludes PS2)||1,697,000||1,547,800||+9.64%|
|Rank||Title||Actual units||Expected units||% From Expected|
|1||Prototype (Xbox 360)||419,900||360,600||+29.59%|
|2||UFC 2009: Undisputed (Xbox 360)||338,300||--||--|
|3||EA Sports Active (Wii)||289,100||--||--|
|4||Tiger Woods PGA Tour 10 (Wii)||272,400||268,600||+1.41%|
|5||Wii Fit (Wii)||271,600||349,000||-22.18%|
|6||Fight Night Round 4 (Xbox 360)||260,800||--||--|
|7||Fight Night Round 4 (PS3)||210,300||--||--|
|8||Mario Kart (Wii)||202,100||--||--|
|9||Red Faction: Guerrilla (Xbox 360)||199,400||220,800||-9.69%|
|Total Software Sales||$625.8M||$616.2M||+1.56%|
|Total Tracked Software Units||1,356,000||1,347,700||+0.62%|
Where do the expected sales numbers come from?
The simExchange is the video game stock market. Gamers and developers sign up on the simExchange for a free trading account. Using fantasy money, players buy virtual stocks in video games they believe are under-predicting sales and short sell stocks they believe are over-predicting sales. This concept is widely known as "the Wisdom of the Crowd" and this system is known as a "prediction market." Sign up and play today.
About the predictions
Predictions on the simExchange should become more accurate over time as (1) the diversity of the pool of traders increases and as (2) more accurate players are rewarded with more virtual currency for their accuracy (thereby enabling them to form more predictions) and less accurate players lose virtual currency (thereby discounting their ability to form more predictions).