Videogame Sales Slump

The holiday sales cycle just became more important than ever for the videogame industry.

Already coping with a rather lackluster year so far, September sales figures--compiled by the NPD Group—didn’t bring any good news. Overall industry revenues fell 8% to $1.2 billion from the year prior, which includes hardware, software and accessory sales. Year-to-date revenues are also down 8% to $9.5 billion compared to this time last year.

Of particular interest to the music industry is software sales (read: the actual games) which fell 6% to $614 million over last September, despite the releases of such games as “Halo: Reach” (which sold 3.3 million units) and “Madden NFL 11.” Analysts had expected an increase given the expected popularity of those titles. Year-to-date game sales are down 8% over last year at $4.9 billion.

NPD analyst Anita Frazier tempered the bad news with optimism that digital sales of downloadable content not tracked by traditional retail channels may offset these losses.

"While industry sales of new physical retail sales show a decline versus year ago, it's important to remember that there is a growing volume of content being sold digitally, or otherwise outside the traditional retail channel,” she said in a statement.

NPD estimates non-traditional revenues for the first half of 2010 totaled between $2.6 - $2.9 billion. However that includes not only downloadable content, but also social games, mobile game apps, game subscription services, game rentals and used game sales. Part of these figures include songs purchased through such game franchise as Guitar Hero and Rock Band.

Speaking of such games, October will see a rash of new music-based titles hitting the market. Already, the new “Guitar Hero: Warriors of Rock” from Activision hit shelves Sept. 28, and the “DefJam Rapstar” hiphop karaoke game dropped on Oct. 5. Coming up still are “DJ Hero 2” and “PowerGig: Rise of the SixString” next week on Oct. 19. Finally, there’s “Rock Band 3” coming from MTV and Harmonix, which adds the new element of a keyboard controller to the mix, and also their “Dance Central” game coming out with the launch of Microsoft’s new Kinect motion-based Xbox 360 controller on Nov. 4.