Video games on track to hit $20 billion

Smash hit "Call of Duty: Modern Warfare 2" couldn't keep game sales from dropping 7.6% last month.

By TheStreet Staff Dec 11, 2009 11:43AM

TheStreetBy Jeanine Poggi, TheStreet

 

Video game sales fell 7.6% in November, despite the highly hyped launch of “Call of Duty: Modern Warfare 2.”

 

Hardware sales tumbled 13.4%, while software slipped 3.1%, both missing analysts forecast, according to the NPD Group.

 

Still, compared with last year's record-setting numbers, these results aren't as bad as they seem. Sales of video games still could reach $20 billion for the year, NPD said.

 

Bing: More on "Call of Duty: Modern Warfare 2"

 

While this would mean December sales would have to increase 11% from last year, NPD analyst Anita Frazier is optimistic. "More positive economic news, combined with 'frugal fatigue' could positively impact industry sales during the last week of the holiday season," she said in a statement.

 

Breaking even is less likely. December would have to be up 36% from a year earlier.

 

Nintendo's Wii remains the best-selling console of the month, followed by the hand-held Nintendo DS, Microsoft's (MSFT) Xbox 360 and Sony's (SNE) PlayStation3. The three companies have been slashing prices and lowering inventory in response to the economic downturn.

 

While “Call of Duty,” this year's top-selling item, almost quadrupled the sales of last year’s big winner, it couldn't make up for softness in other areas, NPD said. The top 50 games this year sold 5% fewer units than the top 50 from last year.

 

Shares of video game retailer GameStop (GME) have fallen more than 3% in the past year, while Sony stock is up by more than 35%.

 

Related Articles

 

Five video-game developments for 2010

 

Ciena hopes sales growth trumps risk

 

Apple Tablet geared as Kindle killer

 

 

 

 

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