MAY 29 | PHYSICAL: Videogame sales have slowed from their 2008 pace, but retailers still see a lot of momentum in the category heading into the E3 conference and tradeshow in Los Angeles June 1-4.
Although ‘it’ status has cooled, with NPD noting that April’s hardware/software business fell 17% from a year earlier, retailers including F.Y.E., Blockbuster and Redbox recently stepped up their game merchandising. Sources said grocers and office supply stores also are angling to jump into games, particularly for the family-friendly Nintendo Wii.
Wholesale distributor VPD has seen its retailers ordering more conservatively but is not overly concerned.
“We definitely see customers buying tighter, where they buy the quantities that they need for the coming week, and not what they might need for the next three to four weeks,” said Andrew Craft, general manager for VPD Games. “But for us, the Wii is still very strong, and because it’s the cheapest [next-generation console], it will be affected the least.”
Another source agrees with this assessment, explaining, “The recession is finally being acknowledged in games, but we’re hoping it starts bouncing back. Traffic in the stores is down. Rental game activity is down quite a bit. And sales are in line with NPD. But there has been an influx of non-traditional businesses getting into games. The number of groceries offering game sales has at least doubled" over the last couple of years.
Retailers seem to see the big picture and assume the economy will improve at some point and return consumers to their usual shopping routines.
Plus, there is excitement over the fact that the upcoming 2009 game crop includes titles from established hits, such as Assassin’s Creed 2, Uncharted 2: Among Thieves and Bioshock 2.
Other highlights include Sony PlayStation Portable extending past its core male base by launching the first Hannah Montana game for the handheld later this fall.
“Last year at this time, any title would have flown off the shelf, but consumers are definitely being more selective,” said Steve Torr, director of software purchasing/rental at InMotion Entertainment. “But once the economy picks up, people will be better with their discretionary income.”
The growth rate of the next-generation consoles is declining as penetration spreads further into homes. Wii system unit sales dropped more than 50% in April, according to NPD. Yet retail is optimistic that the Wii will maintain its heat with the release of further accompanying software. One E3 rumor is that Nintendo will announce plans for an enhanced version of its well-liked Fit game.
“Games are still doing well,” Video Buyers Group president Ted Engen said. “It’s not on the record pace of last year. Some of the newness has worn off the Wii a little bit. But the system is still doing great. Kids are still into this.”
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