[vc_row][vc_column][vc_column_text]Analyst note: This article takes into account publicly shared NPD data and information shared by reliable sources. Sales data, aside from general statistics for hardware, software, and accessories sectors, is not released to the public by NPD and is only shared by certain companies with their consent. Only Microsoft publicly shared its hardware sales data for October, while Bethesda and Take-Two chose to share limited software sales data. All other statistics are based on reliable sources and are purposely vague but paint a reasonable estimate for analysis.
Stop me if you’ve heard this before: October 2012 was another month of declining sales for the video game industry, in terms of hardware and boxed/physical software.
It is the eleventh consecutive month of declines, dating back to December of 2011, and YOY (year over year) sales revenue fell by 25% overall to $755.55 million dollars. Hardware sales, as has been the case throughout the industry slump, led the declines with a 37% plunge versus October 2011 to $187.3 million dollars. Software sales slid 25% to $451.8 million dollars. The lone bright spot was the accessories sector, which was up 5% to $135.6 million dollars thanks largely to Skylanders items.
These numbers shouldn’t surprise anyone as this console generation continues to show signs of overstaying its welcome. The Xbox 360 continues to lead the pack, but it’s not the strong performer that it was a year ago. The 270,000 units sold last month mark a steep drop of more than 31% versus last October. The YOY declines, according to sources, extended to all other platforms: 3DS, PlayStation 3, and Wii. Wii console sales plummeted by nearly 80%. PlayStation 3 sales fell by more than 20%, and perhaps significantly more than that. Reasonable price cuts for the Xbox 360 and PlayStation 3 are long overdue, but even when they do come, there’s reason to believe that they won’t do much to turn the tide. The “good” news for console hardware sales is that YOY targets for next year should be much easier to achieve. If sales can’t meet those lower bars, then 2013 is going to be another long year until potentially very late in the period.
It’s telling when Nintendo doesn’t release any NPD information for a month that contains a Pokémon release. Part of the problem is the Wii, which is no longer relevant. The other part of the problem is that 3DS sales are good, but not great. In fact, 3DS sales were down YOY for a fourth straight month. Keep in mind this period of declines includes a new Mario game and a new Pokémon game. Granted, the latter also plays on legacy DS hardware, so it’s not the draw that New Super Mario Bros. 2 should have been, but it’s still notable that it didn’t help. Also keep in mind that YOY targets for November (~800,000) and December (~1.6 million) are pretty lofty. It’s likely that 3DS will close 2012 with six consecutive months of YOY declines. This is not to say that 3DS is “in trouble”, but it’s fair to argue that its success is slowing here in the United States.
After showing faint signs of life last month, Vita sales again dropped below 10,000 units per week in October. It’s the second time in the last three months that Sony’s troubled handheld has failed to crack the 40,000 mark. All eyes now turn to November and what effect – if any – that portable versions of Assassin’s Creed and Call of Duty will have on sales. There are Black Friday sales for Vita hardware popping up, but I do wonder how it can compete against a more popular handheld in the 3DS and against tablets like Apple’s iPad Mini and Google’s Nexus devices. Vita hasn’t crossed 100,000 units sold in a month since March, so that would probably be the first step… but even a six-figure sales month in the busiest period of the season isn’t impressive. Even the PSP sold 228,000 units last November. Sony needs a big month out of Vita this month. Without it, there will be decreasing reasons for retailers to even bother paying for shipments and stocking the platform. As it stands, those reasons are already sparse.
As has been the trend in recent months, I’m not going to touch on software too much. Unlike hardware, which is all physical, NPD doesn’t have the ability to track all software sales. Take-Two’s NBA 2K13 topped the charts, but with digital sales becoming more prominent, it’s difficult to paint a complete picture of what the software sales landscape really looks like. A case in point is XCOM: Enemy Unknown. XCOM only had 114,000 units sold in October, so initially you might think that it’s a bust… but not factoring in digital sales, such as via Steam, doesn’t give you a clear picture of the game’s success. The one notable bright spot is the fairly strong performance of Dishonored, which sold more than 460,000 units in October. That’s a good number, especially for a new IP. I’m not convinced that the game’s success will continue outside of the first month, but it’s still pretty successful nonetheless.
Finally, it’s worth noting that sales of Resident Evil 6 – the #2 best-selling game of the month – were slightly above 800,000 units combined. That’s about half as successful as Resident Evil 5 was, and it’s also notable because it means that only one game probably broke the million mark in October (NBA 2K13). Compare that with two games that sold more than 1.5 million units apiece in Battlefield 3 and Batman: Arkham City, and it’s easy to see why software YOY comparisons were down.
There won’t be much relief this month. Even with Wii U making its splash just prior to Black Friday, supply won’t be enough to offset likely declines in all other platforms. The Xbox 360 should win the month once again, but the competition behind it will be more tightly bunched. 3DS will probably take the second spot, then it’s a matter of supply for the Wii U and if it’s enough to outpace the struggling PlayStation 3. Perhaps, with new software bundles, the Wii can muster one last month of decent sales… and then there’s the struggling Vita, which is a wild card at this point and needs to prove that it’s not irrelevant already.
The software sector doesn’t have it easy, either. Black Ops II needs to clear 9 million units to keep pace with Modern Warfare 3, and that’s complicated somewhat by competition with Halo 4 on the biggest Call of Duty platform in the Xbox 360. Early projections would probably put Black Ops II in the top spot, followed by Halo 4 and Assassin’s Creed III. Combined, these games need to sell about 14 million copies to break even with November 2011’s big three.
We’ll be back in December to break it all down and see who finished where. In the meantime, comments and questions are always welcome and here’s our best estimates for the Top Ten Hardware and Software sales for October 2012:
NPD’s Top Hardware Sales in October
01. Microsoft Xbox 360 (270,000 units, -31% YOY)
02. Nintendo 3DS (N/A)
03. Sony PlayStation 3 (N/A -20% YOY)
05. Nintendo Wii (N/A -80% YOY)
06. PlayStation Vita (less than 40,000 units)
NPD’s Top Ten Combined Software Sales in October
01. NBA 2K13 (360, PS3)
02. Resident Evil 6 (360, PS3)
03. Pokémon Black Version 2 (DS)
04. Dishonored (360, PS3)
05. Pokémon White Version 2 (DS)
06. Madden NFL 13 (360, PS3)
07. FIFA Soccer 13 (360, PS3)
08. Medal of Honor: Warfighter (360, PS3)
09. Borderlands 2 (360, PS3)
10. Skylander Giants (Wii, 360, PS3)