Video Game Sales Continue May Decline

Sales of video game hardware and titles dropped 11% to $641 million in May compared to sales of $720 million during the previous-year period, according to new data from The NPD Group.

The decline was spearheaded by 20% drop in consoles to $149 million from $186 million, and 13% drop in software sales to $262 million from $301 million last year.

It was the worst May for software sales in six years. Sales of accessories and game cards remained flat at $230 million.

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Analysts contend the slowdown is largely due to consumers waiting for pending new edition – i.e. Microsoft’s Project Scarlett – consoles in 2020.

“Console makers will likely ensure that physical discs exist for at least one more console cycle, which could reverse negative comp trajectory,” Wedbush Securities media analyst Michael Pachter wrote in a recent note.

Indeed, Pachter doesn’t expect the next console cycle to eliminate physical discs altogether. He says consumers still value physical games for their portability, ease of gift giving and the ability to trade them in at retailers such as GameStop and Best Buy.

“Notwithstanding dire pronouncements about the imminent demise of physical media, our covered game publishers still sell over 50% of their console games in physical form,” Pachter wrote.

Best Buy Widens Q1 Entertainment Sales Decline

Christmas is officially over. The post-winter holiday blues hit Best Buy entertainment sales with a thud.

The nation’s largest consumer electronics retail chain May 23 reported a 12.7% drop in same-store entertainment sales to $424 million for the quarter ended May 4. The business unit includes DVD/Blu-ray Disc movies, video game hardware and software, books, music CDs and computer software.

Entertainment sales declined less than 1% to $504 million in the previous-year period.

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International entertainment sales dropped 14% to $33 million, compared to an 8.3% decline to $41.8 million in the previous-year period.

Overall, Best Buy upped domestic operating income 24.3% to $332 million from $267 million last year. Revenue upped less than 1% to $8.48 billion from $841 billion.

The largest comparable sales growth drivers were appliances, wearables and tablets.

Domestic ecommerce revenue of $1.31 billion increased 14.5% on a comparable basis primarily due to higher average order values and increased traffic. As a percentage of total domestic revenue, online revenue increased to 15.4% versus an increase to 13.6% last year.

On June 11, CEO Hubert Joly transitions to the newly created position of executive chairman. CFO and strategic transformation officer Corie Barry becomes Best Buy’s fifth CEO and first female chief executive.

Joly appears to relish the transition from day-to-day operations to cushy board oversight.

“I am very proud of the seamless transition we have decided to implement, as it reflects positively on our momentum as well as our focus on executive development and succession planning,” Joly said in a statement.

Roku Enhances User Experience with Software Update

Roku April 9 revealed it is rolling out new software – dubbed OS 9.1 – designed to make user access to video and music content easier.

The Los Gatos, Calif.-based streaming media co-pioneer (along with Netflix) search for content genres using text or voice search now features a browsable collection of movies and TV shows. The titles are categorized from free, on-demand, subscription and 4K.

New voice commands include saying “replay” to go back a few seconds, “turn closed captions on/off,” to toggle closed captions, or if you can turn the TV display off while streaming select music channels like Pandora, iHeartRadio and TuneIn by saying phrases like “turn display off.”

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A new “guest” mode (previously known as Auto Sign Out Mode) allows third-party users  to sign in to subscription channels using their own account credentials on your device. You can enable or disable the feature for specific Roku devices from the “my linked devices” section on the “my account” page on Roku.com. You can also sign a guest out of a device if the guest left early or selected the incorrect sign-out date.

In addition to a “my offers” link affording Roku users to special deals and discounts, the software upgrade enables users to bypass re-entering log-in credentials when activating a new Roku device.

“Automatic account link” is available on nearly 10 subscription streaming services including Pandora and Sling TV, with additional services expected to be supported soon.

The software update is available on select Roku streaming players today and is expected to roll out to all supported players in the coming weeks,” Ilya Asnis, SVP Roku OS, wrote in a blog.

Roku TV models are expected to receive the update in early summer.