NPD: Record October Video Game Revenue Tops $4.39 Billion

Consumer demand for video game hardware, software and accessories continues unabated. The games market saw a 16% revenue uptick in October to a record $4.39 billion, from revenue of $3.78 billion in the previous-year period, according to new data from The NPD Group. That’s the sixth-consecutive month of revenue increases across all market segments.

Through 10 months of the year, consumer spending exceeds $46.7 billion, up 12% from $41.7 billion during the same period last year.

Despite ongoing product shortages, game console sales skyrocketed 82% to $472 million, from $259 million last year. Accessories increased 5% to $158 million, from $150 million. Video game revenue increased 11% to $3.75  billion, from $3.38 billion. Mobile gaming revenue jumped 12% to more than $2 billion, from $1.78 billion last year.

Nintendo Switch regained the monthly hardware sales No. 1 ranking after months of Sony PlayStation 5 domination. Through 10 months, the PS5 leads in revenue while the Switch leads in unit sales. Nintendo recently announced it was considering a next-generation Switch, which was last launched in 2017.

NPD: PlayStation 5 Snaps Nintendo Switch’s 33-Month Run as Top-Selling Game Console

Sony’s PlayStation 5 video game console was the top-selling unit in September, ending a 33-month run by Nintendo Switch as the industry’s top-selling console, according to new data from The NPD Group. November 2018 was the last month a game platform (PlayStation 4) other than Switch led in unit sales.

In a blog post, NPD analyst Mat Piscatella wrote that September hardware dollar sales increased 49% to $412 million when compared to the previous-year period at $276 million. Year-to-date hardware spending is up 49% to $3.5 billion, compared with $2.35 billion at this point last year.

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September game sales, which includes hardware, software and accessories, inched up 3% to a record $4.36 billion, from $4.24 billion last year — a notable achievement considering ongoing chip shortages due to the pandemic.

Meanwhile, software sales, which include packaged media, digital and subscription, were flat at $3.78 billion. Accessories fell 12% to $171 million, from $193 million during the previous-year period.

NPD: March Sets Another Monthly Video Game Revenue Record

Another month, another 30 days generating record billions of dollars in sales of video games, hardware and accessories. New data from The NPD Group found that gamers spent record $5.61 billion in March, which was up 18% from $4.75 billion spent in the previous-year period.

Through 90 days of 2021, video game spending is up 30% to $14.92 billion from $11.47 billion last year.

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Main revenue drivers include next-generation game consoles from Sony PlayStation and Microsoft Xbox. But notably, the biggest seller in the month was the Nintendo Switch, which outsold the PS5 and Xbox Series X combined in unit sales. The PS5, however, remains the fastest-selling console in U.S. history in terms of units and dollars. Hardware sales skyrocketed 47% to $680 million, from $462.5 million a year earlier.

Software sales grew 14% to $4.63 billion, from $4 billion a year earlier, while accessories sales leaped 26% to $300 million, from $238 million. Accessories are up 42% through 90 days to $717 million, from $505 million last year.

NPD: June Video Game Sales Jumped 26%

The video game industry’s torrid sales streaks in April and May slowed a bit in June, reaching $1.2 billion, which was still up 26% from $952 million in sales in June 2019, according to new data from The NPD Group. Through the mid-year point, game sales top $6.6 billion — the highest tally since the same time period in 2010 — and up 19% from $5.54 billion in 2019.

After a three month surge, console sales dropped 17% to $191 million from $230 million last year as gamers await next edition units from Sony and Microsoft this winter. Through the half-year, hardware revenue is up 25% to $1.6 billion from $1.28 billion last year. Nintendo Switch again led all platforms in unit and dollar sales.

Sales of game accessories and game cards jumped 29% to $417 million from  $323 million last year. The top-selling accessory was the Xbox Elite Series 2 Wireless Controller. Year-to-date accessory sales are up 15% to $2 billion from $1.74 billion.

Finally, software sales skyrocketed 49% to $570 million from $382.5 million — driven in part by the launch of Sony’s The Last of Us: Part II. NPD game analyst Mat Piscatella, in a post on Twitter, said Sony’s release topped Call of Duty: Modern Warfare and Animal Crossing: New Horizons.

GameStop Winter Retail Sales Fell 27.5%

Video game retail sales took another hit when GameStop, the world’s largest physical video game retailer, Jan. 13 reported a 27.5% decline in sales for the nine-week holiday period ended Jan. 4 compared with the previous-year period. Total comparable store sales decreased 24.7%, following a 1.5% increase in comparable store sales for the similar period in fiscal 2018.

The gaming sector continues to suffer from consumer indifference while awaiting next-generation consoles coming out this winter.

“We expected a challenging sales environment for the holiday season as our customers continue to delay purchases ahead of anticipated console launches in late 2020,”  CEO George Sherman said in a statement. “However, the accelerated decline in new hardware and software sales coming out of Black Friday and throughout the month of December was well below our expectations, reflective of overall industry trends.”

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Sherman said the chain saw continued growth in the Nintendo Switch platform, which he said supports management’s view sales will strengthen as new consoles and innovative technology are introduced.

GameStop re-adjusted its sales outlook for fiscal 2019 and now expect earnings to be below guidance.

Comparable store sales are now expected to decline in the range of 19% to 21% for fiscal 2019. While not updating earnings per share guidance at this time, GameStop expects an adjusted net loss for the fiscal year, with adjusted earnings per diluted share impacted by the further deceleration in sales in December.

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Despite the downturn, Sherman said the retailer continues to manage inventory effectively and anticipates ending fiscal 2019 with inventory down approximately 26% as compared to the fiscal year ending 2018.

GameStop now expects capital expenditures for FY2019 to be in the range of $75 million to $80 million, and forecasts total cash and liquidity, including availability under the revolving line of credit, at the end of the fiscal year to be approximately $900 million.

“While we expect the challenges that we faced in the fourth quarter to continue into fiscal 2020, we believe we have the right long-term action plans in place to optimize profitability and increase new revenue streams in advance of new console introductions for holiday 2020,” Sherman said.

GameStop reports fourth-quarter and full fiscal-year 2019 results in late March. Wall Street isn’t waiting, sending shares down more than 8% in after-market trading.

 

GameStop Fiscal Woes Continue

As expected, GameStop Dec. 10 reported a third-quarter (ended Nov. 2) net loss of $83.4 million, which was an improvement of sorts from a net loss of $488.6 million during the previous-year period.

The narrowed loss is hardly a bright spot since the nation’s largest video game retailer reported significant declines in every business segment except collectibles.

Global sales decreased 25.7% to $1.4 billion, driven by a consolidated comparable store sales crease of 23.2%. New hardware sales decreased 45.8%, reflecting anticipated next generation console launches in 2020. New software sales decreased 32.6%, with growth in Nintendo Switch software titles more than offset by weaker title launches across other consoles in the quarter compared to last year.

Accessories sales decreased 13.4%, pre-owned sales declined 13.3% with declines in hardware and software. Collectibles sales increased 4.3%, with continued growth in both domestic and international stores.

Yet, collectibles, which includes memorabilia, T-shirts, action figures,  associated merchandise and has been the chain’s lone growth area, saw revenue grow just 4.3% — down from 14% last year.

“Our third quarter results continue to reflect the prevailing industry trends, most notably the unprecedented decline in new hardware sales seen across the market as the current generation of gaming consoles reach the end of their lifecycle and consumers delay their spending in anticipation of new hardware releases,” CEO George Sherman said in a statement.

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With console makers set to introduce new and innovative gaming consoles in late 2020, the gaming industry has been on life support as gamers cut spending. In addition, the industry — similar to other packaged media — is migrating toward digital distribution.

“We anticipate this trend to continue until the fourth quarter [next year],” Sherman said.

Regardless, the CEO said GameStop remains on track to achieve $200 million annualized operating profit improvement goal by 2021.

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“We believe our strategic initiatives will enable to us to achieve our long-term growth and profit objectives as we fully leverage our unique leadership position and brand in the video game space,” he said.

Wall Street wasn’t impressed. GameStop shares fell 15% in aftermarket trading.

Nintendo Switch Lite Launches

Nintendo has launched Nintendo Switch Lite, which is cheaper and lighter than the original Switch, as well as a new Switch game, The Legend of Zelda: Link’s Awakening.

“The introduction of Nintendo Switch Lite gives people the choice of a Nintendo Switch system that best fits their needs and personal play style,” said Nick Chavez, Nintendo of America’s SVP of sales and marketing. “With the simultaneous launch of The Legend of Zelda: Link’s Awakening, today is a great day for newcomers and existing Nintendo Switch owners alike.”

A lightweight device with integrated controls designed specifically to play Nintendo Switch games that support Handheld mode, Nintendo Switch Lite is available in three colors: yellow, grey and turquoise. Available at $199.99, the system has integrated controls and is smaller than the original version. The original Nintendo Switch, which offers TV mode and Tabletop mode, in addition to Handheld mode, retails at $299.99.

As a dedicated handheld gaming device, Nintendo Switch Lite supports all Nintendo Switch software that can be played in Handheld mode. It’s designed for consumers who have lots of opportunities to play on the go, and for anyone who wants to play online via Nintendo Switch Online (sold separately) or local wireless multiplayer with friends or family who already own a Nintendo Switch system.

The Legend of Zelda: Link’s Awakening, which can be played on any system in the Nintendo Switch family, is available at $59.99.

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In the new Chamber Dungeon mode, players earn Chambers (dungeon rooms) throughout the story and arrange them to complete objectives. Launching alongside the game is a new Link amiibo figure. By using this figure, players can unlock Shadow Link in the Chamber Dungeon.

Also launching is The Legend of Zelda: Link’s Adventure, a reimagining of one of the games in the series. Link has washed ashore on a mysterious island, filled with strange and colorful inhabitants. To return home, Link must explore a reimagined Koholint Island that’s been faithfully rebuilt in a new art style. Along the way, he will battle enemies and conquer numerous dungeons riddled with tricks, traps and enemies, including some from the “Super Mario” series.

Nintendo Offering 12-Month Switch Online Membership with ‘Tetris 99’ Game

Nintendo Switch device owners can now pick up a new bundle at select retailers that includes the Tetris 99 game and a 12-month membership to Nintendo Switch Online at $29.99 SRP.

Launched last year as competition to PlayStation Plus and Xbox Live, the standalone Switch Online membership is normally $19.99, which includes access to multiplayer games, catalog of NES and SNES games and cloud storage, among other features.

Nintendo Switch Online members also gain access to a smartphone app that enhances features of supported games.

In Tetris 99 “battle” mode, players can take part in 99-player battles, competing to be the last person standing. Players who are more traditionalists can see how long they’ll last offline in the single-player “marathon” mode.

While offline, players can take on 98 CPU players, pass a Joy-Con controller to a friend for a two-player game against each other and CPU opponents on one Nintendo Switch system or face off with up to seven other players who have their own systems and games via local wireless connection.

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Report: Sony ‘PlayStation 5’ to Focus on Major Games, Tech, Including 8K Resolution

Sony Interactive Entertainment appears to be taking a page from Sony Pictures, focusing internal efforts on proven content and wow-factor graphics, among other features.

The Wall Street Journal reports that Sony’s unnamed fifth-generation video game console — reportedly set to launch in late 2020 — will cater to established game publishers featuring graphics-heavy features.

The strategy is not dissimilar to Sony Pictures focusing on proven franchises such as “Spider-Man,” “Ghostbusters” and “Jumanji.”

“Details when making games have become more important than ever,” Kenichiro Yoshida, CEO of Sony Corp., reportedly said at a recent company briefing.

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Expectations are high for PlayStation, whose PS4 console continues to generate significant sales, including projected 17+ million units in 2019 — five years after launching.

The PlayStation brand, including hardware, software and subscriptions, generated more than $21 billion in revenue — and $3 billion operating profit — in Sony’s most-recent fiscal year.

By comparison, Sony Pictures generated about $9.2 billion in revenue, which trailed televisions and speakers ($10.1 billion) and topped smartphones at $4.6 billion.

The new PlayStation comes as the gaming industry grapples with changing technology and distribution to consumers — notably cloud-based online gaming.

Google plans to launch its Stadia platform in November while Apple readies Apple Arcade — both services circumventing traditional game consoles such as PS4, Xbox One and Nintendo Switch.

According to WSJ, Sony contends online gaming doesn’t allow hardcore gamers the ability to engage in graphics-heavy content, audio and 8K resolution, among other features, due to spotty broadband connections and other tech challenges.

“[This] clearly demonstrates why it makes sense to have a next-generation console,” Yoshida said.

Sega’s ‘Rock of Ages 2: Bigger & Boulder’ Available Digitally on Nintendo Switch

Sega’s Rock of Ages 2: Bigger & Boulder is available now digitally on the Nintendo Switch at $14.99.

Anyone who buys the game, featuring a combination of surrealistic art, historically inaccurate storytelling, and chaotic gameplay, within the first two weeks of launch will receive a free Binding of Isaac Pack DLC set. The set contains a special Isaac boulder, three in-game avatars (Isaac, Azazel, and Blue Baby), and three Isaac-themed banners to adorn the battlefield and units. The offer ends May 28.

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Rock of Ages 2: Bigger & Boulder features up to four-person multiplayer gameplay; “Utter Chaos,” which expands on the first game with a more diverse selection of units and a larger focus on rock-smashing strategy; improved physics and destructible environments; “ACE Team’s Trademark Quirkiness”; and “Historically Inaccurate Bosses,”allowing players to take on works of art come to life in boss battles featuring the likes of The Thinker and the Great Sphinx, leading up to the all-powerful final boss.