Holiday Game Sales Not Looking Optimum?

Thanks to Yahoo/Reuters for their report suggesting that videogame sales aren't quite as spectacular as hoped, so far this holiday season. Analyst reports cite retailer concerns over: "soft sales", apparently due to "few 'hot' new titles, slow hardware sales, high software price points, and increased competition for consumers' home entertainment dollars as newer technologies become more affordable." Nonetheless, industry observers are expecting "12.5 percent year-over-year software sales growth for November", but this still will "fall well short of original analyst, publisher, and retailer estimates." Finally, although the article cites "broad agreement that there is no blockbuster title this holiday like last year's Grand Theft Auto: Vice City", the "top title at retail" in analyst estimates was EA's Need for Speed Underground, and other top-sellers include True Crime, Tony Hawk's Underground, and GTA Double Pack.

Comments

Estimates Too High? Shock of Shocks!

[Babbster]

Welcome to the land of trying to inflate stock prices. I find it amusing that an article can describe a year-over-year increase in sales (a 12.5% increase in sales should be something to celebrate, not lament) and then paint such a dreary picture.

I have a suggestion as to WHY analysts have been too optimistic about increasing video game sales (besides trying to inflate stock prices, of course). I think it's likely that analysts are looking at the console sales and the potential increase in game sales without taking into account the fact that gaming newcomers are probably going to buy fewer games overall than their "hardcore" brethren. For example, someone who stood in line for 10 or more hours in the freezing cold to buy a PS2 on launch day is probably an avid gamer who will spend a lot of money on new games. On the other hand, someone who picked up their first game console within the past year is more likely to be someone who was waiting for console prices to come down and will probably spend less discretionary income on software.

Of course, there are still two big shopping weeks to consider. The second week (26th through 31st) in particular could be interesting because we'll see how people spend their liquid holiday loot. In any case, it's too early to make any big hay out of this. Maybe a week or two after New Year's, an article like this could have some SOLID numbers.

Re:Not great news from the sales floor

[Oddly_Drac]

"I work in a major game retailer in the UK and I have to agree that it is looking pretty grim."

If that's 'Game', they will look pretty grim. Go check out play.com to see how much you're being undercut.

One of the major factors in the UK at the moment is that prices haven't budged before Christmas; there was a time when, like the food retailers, quite a few places would reduce their prices in the run up to increase the short term spending power of the customer...this has all but disappeared in the media and electronics industry (although they're still trying to shift the X-boxes this year.)

BTW, you didn't mention Worms3D, NFS:Underground or Max Payne 2. They aren't selling?

Well, I'm doing my bit

[deek]

I've never spent so much on games and game equipment for Christmas. I've bought a Gamecube, Zelda Wind Waker, Super Mario Sunshine, a 251 block memory card and a component cable. It was a smart decision for Nintendo to drop the price of their console. I wouldn't have spent so much otherwise.

this is why unqualified percentages are naughty

[*weasel]

firstly, game sales are not 'down'. the forecast -was- 18% growth, now it's merely 12.5%.

and they will still enjoying that double digit sales growth, even if another video game isn't sold all year. sales are only 'down from forecasts'. boo hoo. to have continued double digit growth in a time when most consumer markets are down or treading water must be a real bummer.

and the data is not even all in, nor does this article leverage any data aside from a vague 1-3% stock prices wiggle (which is not part of any trend, nor is it statistically significant) and some subjective measures from off-the-books sources. 'too much inventory', 'not exciting'... this is journalism?

Vice City set the holiday sales charts on fire last year because it was a great game. but, it could've sold that many copies in the middle of the summer, and then we wouldn't be reading this article.

imo, i wouldn't say the data is 'not looking too good'. but sensationalist journalism is what makes headlines.

first, you need is a freelance writer who gets paid only when his articles are published -- not when they're good, and not when they're accurate (Ben Berkowitz). then you need a single 'analyst' willing to go on the record and provide some quotes that can be interpreted as desired, but don't even actually -agree- with the story at hand (one US Bancorp Piper Jaffray analyst Tony Gikas). stir, publish, and congratulations!

you've churned out a publishable story about a poor holiday season, contrary to all the available evidence.