There may be something of a summer lull showing in video game hardware sales, according to July's NPD results -- though year-over-year sales are up 17 percent, all platforms saw declining results compared to June
Analysts aren't worried, though, noting a build-up to an anticipated holiday spike -- meanwhile, the Big Three console manufacturers are choosing to shift focus to their software performance, or to take a wider-lens view of their year-to-date unit sales and overall market positioning.
The big picture is still good: July's NPD results were marked with a 28 percent year-over-year increase to $1.19 billion for the industry overall. In spite of month-to-month declines, hardware saw a 17 percent increase year-over-year to $446.9 million, while software took a 41 percent leap on the year to $591.1 million, led by the July debut of EA's NCAA Football 09
Analysts had predicted a slump, and though their exact estimates varied, hardware sales for June either fell slightly short or just barely met predictions. Wedbush Morgan's Michael Pachter notes that Wii supplies, which came in second among all platforms in units sold, still appear to be constrained, while Lazard Capital Markets' Colin Sebastian attributes the sequential decline in Wii sales to "pre-holiday build-up" rather than a demand issue.
Despite declining to 555,000 in July from 666,700 in June and 675,100 in May, Nintendo claimed the top two hardware spots with its DS and Wii respectively, representing a 49 percent share of the total number of consoles sold in July -- Cowen Group's Doug Creutz calls it "Nintendominance."
Of the top 10 software titles in July, five of them were made for Nintendo systems, and of these, three were first-party(Wii Fit, Wii Play
and Mario Kart
) and sold bundled with peripherals.
"Great hardware goes hand-in-hand with great software,” said Cammie Dunaway, Nintendo of America’s EVP of sales and marketing, commenting on the NPD results. "Various types of games for the Nintendo systems are represented in the top 10, demonstrating how we continue to break down the barriers between veteran and new players."
PS3 Trumps Xbox 360
As for Sony, its three platforms, the PlayStation 3, PS2 and PSP, showed what the company says is a 99 percent growth in sales year-to-date.
The PS3 in particular sold 224,900 units in July, driven by the Metal Gear Solid 4
bundle, which helped PS3 software sales reach 206 percent year-to-date growth, according to Sony -- but didn't help it reach the 405,500 units it sold in June, when MGS 4
Meanwhile, its PlayStation Network now has more than 10 million registered accounts globally, says Sony, with some 200 million pieces of content downloaded worldwide. July growth, says Sony, is thanks to the launch of PixelJunk Eden, Siren: Blood Curse
and Qore's Episode 03.
Sony also says the God of War: Chains of Olympus
bundle gets the credit for PSP's "solid" July sales, which with 221,651 units sold, show a year-to-date growth of 16 percent.
Sales of PS2, however, continue their gradual decline -- June NPD pegged unit sales at 188,798, while July saw 155,510 units. Sony emphasized that year-to-date sales of PS2 have reached 42.5 million units.
Sony president and CEO Jack Tretton says the 99 percent jump in PS3 sales "reaffirms that consumers are indeed embracing PS3 as their entertainment hub-of-choice," citing the hardware's Blu-ray drive and recently-announced video download service.
"We're confident in a strong second half of the year and look forward to quickly addressing any inventory shortages due to the transition," says Tretton.
Microsoft Points To Software And The Big Picture
Outdone by both Nintendo platforms and two of Sony's, Microsoft outperformed only the PlayStation 2 in July with 204,800 units sold -- less than the 219,800 units Xbox 360 moved in June. In its comments on the results, the company chose to focus largely on its software lineup and the E3 landscape it says it "dominated."
Microsoft claims a 49 percent marketshare for its platform, saying consumers have spent more than $10.4 billion on the Xbox 360, presumably including hardware, software, online and accessories. On the software side, Microsoft says titles for its platform totaled $129 million in sales, or 34 percent of the market.
Microsoft also stressed its "record-setting" attach rate of 7.9 games per console, "the highest attach rate in history for a console at this point in its lifecycle."
Notably, the number-one selling software title in July according to NPD results was the Xbox 360 version of the multiplatform NCAA Football 09
, and Microsoft also elected to highlight G4 Television's fan-voted G-Phoria awards, which chose Xbox 360 exclusives Halo 3
and Mass Effect
, while earning 15 honors for its console, one more than rival PS3.
"We’re projecting 2009 will be even bigger – we’ll sell more consoles, sell more games, and continue to grow our online community at Xbox Live," says Microsoft's statement.