Sony
July sales of Nintendos Wii console tumbled 55 percent to and those of Sonys PlayStation 3 slumped 46 percent, researcher NPD Group Inc. said yesterday. Microsoft Corp.s Xbox 360 sales slipped 1 percent after gaining 9.5 percent in June. Total sales of hardware, software and accessories in the worlds largest video-game market fell 29 percent to $848.9 million, NPD said.
The worst global recession since the Great Depression and the absence of new hit titles contributed to the decline. Earlier yesterday, the Commerce Department reported sales at U.S. retailers unexpectedly fell in July for the first time in three months. Executives at the two largest video-game publishers, Activision Blizzard Inc. and Electronic Arts Inc., said this month that they expect game sales to be even or down compared with last year.
“The challenge for Sony PS3 is the price point,” Mia Nagasaka, a Tokyo-based analyst at Barclays Plc, said by phone today. “In the near term, the company may announce a price cut in hardware,” and it may be enough to spur demand, she said. Nintendo may miss its hardware target this fiscal year ending March 2010, even after the introduction of the Wii “Sports Resorts” in July, Nagasaka said.
Sony lost 0.6 percent to 2,690 yen on the Tokyo Stock Exchange as 12:44 p.m. local time, while Nintendo was unchanged at 25,370 yen in Osaka trading. Microsoft, based in Redmond, Washington, gained 0.4 percent to $23.62 in Nasdaq Stock Market trading yesterday.
Consoles Hardest Hit
Kyoto-based Nintendo maintained its sales forecast of 26 million units for the 12 months ending March 2010, the company said on July 30.
July hardware sales tumbled 37 percent to $280.9 million while software sales fell 26 percent to $436.9 million, according to Port Washington, New York-based NPD.
The drop compares to a 30 percent growth last year on sales of the Wii console and games “NCAA Football 09,” “Wii Fit” and “Guitar Hero: On Tour.”
“In the previous year, strong game titles were concentrated in the last half, but this year, there were more in the first six months,” said Daisuke Nakata, a spokesman at Sonys gaming unit in Tokyo. “Were waiting for the titles scheduled to come out after September, so we anticipate the PlayStation Portable and PS3 will bounce back with the year-end sales war.”
New-Title Boost
The video-game slump may abate as companies introduce new titles, including todays release of “Madden NFL,” said Anita Frazier, an NPD Group analyst.
Last month, Nintendo reported Wii console sales fell 57 percent in the second quarter. Sony said PlayStation 3 slid 31 percent. The two companies wont be able to meet annual sales targets without cutting the price of the $249.99 Wii and $399.99 PS3, Michael Pachter, an analyst with Wedbush Morgan Securities in Los Angeles, said in a note to investors this week.
Price Cuts
A drop in the prices will likely come by October, Pachter said. Microsoft, which has already reduced the price of its least-expensive Xbox to $199.99, also may introduce an upgrade for the console, Pachter said.
Sony may release a less-expensive “PS3 Slim” as soon as this month, Mike Hickey, an analyst at Janco Partners Inc., said in a Aug. 12 report. Julys 29 percent sales drop was almost double the 15 percent dip that Hickey, based in Greenwood Village, Colorado, had expected.
Game companies will converge next week in Cologne, Germany, for the GamesCom conference. Barclays Nagasaka said she expects Sony to announce a $100 price cut for the PS3 at the trade fair, or at the Tokyo Games Show which starts Sept. 24.
Sony Chief Executive Officer Howard Stringer and Nintendo President Satoru Iwata have so far spurned calls by game publishers and retailers to cut console prices to encourage new sales.
No one was available to comment at Nintendos Kyoto headquarters because the company is closed for the summer vacation. Calls to Nintendo in the U.S. outside business hours werent answered.