Canadians spend billions on games
VIDEO GAMES: MARKET SOLID DESPITE DROP
Posted By NEIL DAVIDSON, THE CANADIAN PRESS
After hitting record heights in 2008, Canadian video game sales were down 8.4% in the first quarter of 2009.
But the market for taking down zombies, playing Pokemon or racing Super Mario remains solid despite the drop, according to an analyst. The Wii continues to do well and software sales for next-generation consoles remain healthy despite a lack of blockbuster titles so far this year.
Canadians spent a record $2.094 billion on video game hardware, software and accessories last year, fuelled by a $503-million pre-Christmas spending spree. And figures for January 2009 showed a 12%increase over the same month a year ago.
But sales were down in February and March from their equivalents the previous year, according to The NPD Group, which tracks the industry.
Total sales for hardware, software and accessories were $380.1 million in the first three months of this year, compared to $414.8 million over the same period in 2008. The video game industry traditionally ramps up towards the end of the year, with a crescendo of pre-Christmas spending.
Hardware took the biggest hit, down 16% from the first quarter of 2008. Sales in the first three months were $119.1 million compared to $141.7 million last year over the same period.
Nintendo bucked that trend showing a year-over-year increase, thanks to the success of the Wii.
The Wii became the best-selling console of all-time in Canada when it sold 875,600 units in 2008. In comparison, the Xbox 360 sold around 500,000 and the PlayStation 3 some 430,000.
"Hardware's going to see a bit of the crunch with the economy," said Matthew Tattle, account manager for The NPD Group. "Obviously spending $399 on a console is going to be tough today. It will happen, though. If people want something, they will buy it."
Software sales were down 6%, from $218.9 million in the first quarter of 2008 to $205.2 million this year. In unit sales, however, software was only down about 2%.
And Tattle says new generation console software continues to sell well.
PlayStation 3 software was up 35% in terms of units sold -thanks to the Sony-exclusive "Killzone 2" -while Wii software was up 24% and 360 titles up 6%.
Games for older consoles such as the original Xbox and PS2 have fallen off the map, however.
One reason for the reduced 2009 sales numbers is the fact that consumers spent plenty last year on "Guitar Hero" and "Rock Band" bundles that came with the instruments needed to play the games.
"Those sold so well last year and those were large-ticket items," Tattle said. "People were spending about $200 on a piece of software, which we hadn't really seen before. That was creating a lot of growth in our industry in terms of units as well as dollars."
Spending on those two franchises alone was down $33 million the first three months of the year, which almost accounts for the total market drop ($34.7 million) over the same period.
Another factor in the year-to-year figures is Nintendo's successful "Super Smash Bros. Brawl" came out in March last year and helped pump up the 2008 figures.
Tattle says growth in April may also be unlikely since "Grand Theft Auto IV" came out at the end of the month last year. But sales of the Nintendo's DSi, the new version of its handheld unit, should help the April 2009 figures.
Accessories did show growth in the first quarter, up 3.2% over the first quarter of 2008.
