NPD Thursday --- May 2009

The multi billion dollar video game industry has a unique trait that other entertainment industry’s do not share, a fervor over sales numbers by the enthusiast market. With a higher cost to enjoy the hobby then movies or music, there are a significant amount of individuals that take stock in how well their favorite systems and games sell, rooting for their personal favorites, and booing the efforts that make their choices look lackluster.

On the first Thursday of every month, the retail analyst NPD Group release the top selling software for the previous month, as well as the hardware totals. These numbers open a window into what the general public is purchasing, the trends that lead to continued success, and the game’s that become lost in the ocean of software that releases every month.

This is NPD Thursday.

May is traditionally one of the slowest months for the video game industry. The Easter holiday shopping season passed, and the start of the slower summer season gives way to the release of the game based off the summer blockbuster movies. The doldrums of summer can be lucrative with the right combination of marketing, concept of the game, originality, and brand recognition, but the majority of the titles that release post Easter are safe bets for the publishers.

The May software totals are down from last year, when titles like Grand Theft Auto IV, Mario Kart, and Wii Fit made their debut, or released in the previous month. NPD reported that the total number of titles in the top ten fell 1.1 million units from last year.

Nintendo’s triple threat still maintains position in the May’s top ten software list. Wii Fit, at 352k units sold positioning in second place, Mario Kart, at 158k units sold in seventh place, and Wii Play, at 109k units sold in tenth place, continuing the longest consecutive stretch of appearances on the top ten software list. The return of the long time Nintendo franchise Punch Out!!, 150k units sold at eighth place, adds another first month Wii release to the charts.

The three titles have been the forefront of the “evergreen” titles, games that continue to sell respectable number for several months after the initial release, that have become common on the Wii. The new market that Nintendo taped into continues to purchase these titles, as they are becoming some of the best selling software during this current console cycle.

The biggest surprise of the month comes from the mixed martial arts third party title UFC 2009 Undisputed, which managed to sell a combined one million copies for the Xbox 360 and Playstation 3, 679k units sold and first place on the Xbox 360, and 334k units sold and forth place on the Playstation 3. What was once a niche sport, the huge popularity of this title is a very showing tell at how huge the world of MMA has become in the last few years.

A second third party title that debuted in May that had a strong showing is EA Sports Active for the Wii system. The most significant fitness game since the release of Wii Fit last year, EA Sports Active features a more dedicated workout program, including a resistance band and Wii Remote holder, and debuted in third place with 345k units sold. One of the most impressive third party releases for the Wii system, the title also can be used with the Balance Board accessory that comes with Wii Fit, making it a good complement for Wii Fit.

EA Sports Active has the potential to be the first, big third party “evergreen” title for the Wii system. While titles like Guitar Hero have fizzed out after six months, usually because of further sequels, EA Sports Active is the first game out of Electronic Arts as part of their new Wii strategy. The title should continue to do well as more and more people invest in Wii Fit.

InFamous for the Playstation 3 had a respectable 175k unit sold in less then a week at the end of May. A first party effort, inFamous continues the trend of Sony published titles to premier in the top ten. Time will tell if it will have legs, where titles like Killzone 2 dropped off the chart after a few short months.

Rounding out the top ten is Pokemon Platinum for the Nintendo DS, 169k units sold at sixth place, and Xmen Origins Wolverine for the Xbox 360, 120k units sold at ninth place.

On the opposite end of the spectrum, Bionic Commando, the return of the classic action title from Capcom, was a sales disaster, selling less then 30k copies across all platforms. Their strategy to market the title by releasing the popular Bionic Commando ReArmed was a marketing and commercial failure.

Hardware sales in May seen a large drop almost across the board.

The Wii maintained the top spot for the month for consoles with 290k units sold. The Xbox 360 was next with 175k units sold, and the Playstation 3 had 131k units sold.

On the handheld side, the Nintendo DS family of systems sold 633k units, while the PSP sold 100k units.

As an industry, May was the first time since August 2007 that the gaming industry failed to top the billion dollar mark. The reasons for this drop are many. The deep recession that the country is facing has proved that the gaming industry is not as recession proof, as previous thought. The first half of 2009 was also a rather slim in terms of new, high profile titles. Last year saw titles like Grand Theft Auto IV, Mario Kart, Wii Fit, and Super Smash Bros Brawl were massive selling titles.

On the hardware side, we could be seeing the start of a downward slope as the saturation point at the current price points of the consoles. It is highly possible that we could see all three hardware manufactures lower the price of their systems within the next few months, but only time will tell.

June will be a very telling month if the recession is affecting the consumer’s willingness to purchase games, or if it has just been the selection of games available. Major releases like Tiger Woods 2010, Red Faction Guerilla, Prototype, and the start of the rush of summer movie titles has the potential to move a lot of pieces of software, and offer wide appeal to the entire gaming market.

Thanks and credit to The NPD Group, NeoGAF, and IGN for the numbers used in this post.