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COMPANY TOWN : Video game sales sink

November 13, 2009|Alex Pham

Sales of video games and consoles in the U.S. fell 19% in October, putting the industry on pace to post a decline for 2009.

Console sales crashed 23% to $380.7 million last month, from $497 million in October 2008. Game software sales fell 18% to $572.7 million, down from $698.4 million a year earlier. The grim numbers represent the seventh monthly decline in U.S. video game sales.

"You're seeing the effects of the recession," said Michael Pachter, an analyst with Wedbush Morgan Securities who two weeks ago predicted that U.S. game sales would be down 5% this year.

If October is any indication, the industry may be headed for a grisly holiday, when game companies typically rack up as much as 40% of their annual sales.

With the anticipated dip in holiday sales, "the industry is on track to generate full-year revenues in the range of $20 billion to $21 billion in the U.S., which would put it just below last year's sales of $21.3 billion," said NPD analyst Anita Frazier.

Sales of music-based games, such as the Beatles: Rock Band and Guitar Hero 5, have also lagged, Pachter said.

While mainstream players -- the heroes of last year's soaring sales -- are missing in action this year, so-called hard-core gamers seem to be coming to the rescue. Many came out in force and stood in line for hours Monday night to get their hands on Call of Duty: Modern Warfare 2 the moment it was released at midnight.

The gritty combat game took in $310 million during its first day on sale in the U.S. and Britain. It's on track to bring in more than $1 billion in retail sales worldwide within a few months of release, according to a report by Lazard Capital Markets, putting it in the same entertainment blockbuster league as the movie "Titanic" and the Michael Jackson album "Thriller."

October's results also confirmed the reliability of avid gamers in tough times, with three of the top 10 titles, including Uncharted 2: Among Thieves and Borderlands, squarely in the hard-core category.


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