US Video Game Sales Plummet Amid Recession, Tech Conglomerates Face Challenges

Strategic Insights -

Amid the ongoing US recession, the video game industry has taken a significant hit, with sales plummeting by 29% in July compared to the same period last year. According to the NPD research firm, the industry suffered across the board, with hardware sales falling by 37%, software sales by 26%, and accessories by 12%. The Nintendo Wii was the top-selling console for the month, followed closely by Microsoft's Xbox 360 and Sony's PlayStation 3. The downturn in sales has sparked speculation that console manufacturers may be forced to lower prices to stay competitive.

Key Takeaways:

  • US video game gear and software sales fell 29% in July compared to the same month last year, reaching $848.9 million.
  • Hardware sales plummeted by 37%, software sales dropped by 26%, and accessories fell by 12% in the same period.
  • Nintendo's Wii was the top-selling console in July, while Microsoft's Xbox 360 and Sony's PlayStation 3 took the second and third spots, respectively.
  • Electronic Arts' "NCAA Football 10" was the top-selling game in July, but the company's shares fell by 8%.
  • The slump in sales could lead to console price cuts, putting pressure on manufacturers.
  • InterDigital, a wireless technology firm, faced a patent ruling in favor of Nokia, causing its shares to plunge by 24%.
  • InterDigital reported Q3 sales of $73.5 million to $75.5 million, falling short of forecasted figures.
  • Wireless carriers worldwide have shelled out significant subsidies for Apple's iPhone, but this has not improved their market share, sales, or profits.
  • Dell is developing products for China Mobile, including a potential smartphone called the mini3i.

Statistics:

  • 29% - The declined in US video game gear and software sales in July compared to the previous year.
  • $848.9 million - The total sales figure for the US video game industry in July.
  • 37% - The drop in hardware sales in July compared to the same period last year.
  • 26% - The decline in software sales in July.
  • 12% - The fall in accessories sales in July.
  • 24% - The decline in InterDigital's shares after the patent ruling.
  • $73.5 million - $75.5 million - The forecasted Q3 sales figures for InterDigital.

Sources:

  • NPD research firm
  • Electronic Arts
  • InterDigital
  • Nokia
  • Stranda, consulting firm
  • Reuters
  • Bloomberg
  • Wall Street Journal
  • IDG News Service