Best. Christmas. Ever.

http://www.cnbc.com/id/34867317

Video Game Sales End Sluggish Year 8% Lower
Published: Thursday, 14 Jan 2010 | 6:45 PM ET
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By: Chris Morris
Special to CNBC.com

2009 will be a year the video game industry would like to forget.

Modern Warfare 2
Source: Activision
Snowmobiles battle it out in "Modern Warfare 2". The game was a bright spot for the industry last year.

The industry's sales were down 8 percent compared with the 2008 numbers, sliding to $19.7 billion.

The recession, combined with a steep decline in sales of music games, took its toll on gaming companies. Software sales were down 11 percent to $10.5 billion. Sales of video game systems rallied somewhat toward the end of the year, but were still down for the year.

The numbers come despite 2009 boasting the biggest game release in the industry's history. "Modern Warfare 2" has brought in over $1 billion in worldwide sales for Activision Blizzard [ATVI 10.86 -0.05 (-0.46%) ] since its Nov. 10 launch. It was, predictably, the year's best-selling console title. (NPD tracks only U.S. sales numbers.)

Industry representatives tried to find positive news amid the bad numbers.

"Clearly, 2009 was tough year for consumers and the national economy," said Michael D. Gallagher, president and CEO of the Entertainment Software Association, the video game industry trade association. "However, the bigger picture is one that underscores the industry's strength; 2009 and 2008 were the highest grossing years in our industry's history."

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December, meanwhile, which is normally the industry's biggest month due to holiday purchases, was mixed. Game sales were off 7 percent to $2.58 billion — but hardware sales were up 4 percent over the same period in 2008.

Aggressive pricing by retailers could have affected the software sales numbers. Both Wal-Mart [WMT 54.20 -0.81 (-1.47%) ] and Amazon [AMZN 127.35 -1.76 (-1.36%) ] deeply discounted popular games in a fight for customers during the holiday season.

Meanwhile, spurred by hardware price cuts earlier in the year, December sales of console systems from Microsoft [MSFT 30.96 0.61 (+2.01%) ], Nintendo [NTDOY 35.15 -0.35 (-0.99%) ] and Sony [SNE 33.70 0.54 (+1.63%) ] were up 16 percent to $2.19 billion. Wii sales jumped 77 percent, while PlayStation 3 sales virtually doubled. Sales of the Xbox 360 were off slightly.

Nintendo, as it has in previous years, ruled the holiday season. Beyond the success of the Wii and Nintendo DS, it also published the three best-selling games of the month.

"New Super Mario Bros. Wii," "Wii Fit Plus" and "Wii Sports Resort" together racked up sales of over 7 million units. ("Modern Warfare 2" took the fourth and fifth spots for the Xbox 360 and PS3 versions of the game, respectively. If added together, the game would have been number two in the December rankings.)

With 2009 finally behind it, the video game industry is hoping to see some recovery in 2010. The first quarter is loaded with several major releases from Electronic Arts [ERTS 17.18 0.01 (+0.06%) ], Sony and Take Two Interactive Software [TTWO 10.15 -0.21 (-2.03%) ].

Despite that, there is still a fair amount of skepticism about the year to come. Electronic Arts, in its recent earnings warning for the holiday quarter, noted that it was expecting industry sales in 2010 to be "flat" to down "mid single digits".

Lazard Capital Markets analyst Colin Sebastian seems to agree, saying in a note to investors, "We expect flattish console software sales in 2010. We continue to expect 2010 console sales to be down 1 percent … with overall content revenues up 10 percent, driven by ongoing strong growth in social networking games and mobile/smartphones."

Others disagreed, though.

"We are currently forecasting sales 2010 sales growth of +10 percent, and think that EA's forecast reflects a disaster scenario," wrote Michael Pachter of Wedbush Securities. "In our view, easy comparisons, lower console prices, new peripherals and a solid lineup of big games all but assures robust growth in 2010."

I'm at a loss for words. I've never seen such large sales all around, unless we want to say it is at the expense of the PSP haha. I mean the Wii crushed any known records for a single month in the U.S. (well over DS 3 million and PS2 2.7 million) and DS beat it's last year's December. I mean Nintendo sold over 7 million units last month in the U.S. alone. Then PS360 account for another 2.7 million units in sales. Of course software, NSMB Wii at 2.82 million, MW2 on 360 and PS3 at 2.75 million, and Wii Fit Plus at 2.4 million. Then a lot of other big sellers. This is easily the biggest holiday season ever.

The 360 had a great run and it's time for Microsoft to focus on Natal to rejuvenate the platform because the PS3 is outselling it in every region of the world.

Incredible... although Nintendo already reported some amazing sales numbers NPD shows they were actually more impressive than that. I guess they wanted to "wow" us twice...

So Wii breaks the record for highest week ever, DS also broke the old record, the PS3 and Xbox 360 continue their close fight with PS3 this time on top. As for software, 6 titles above 1 million in 1 month... has that ever happened before? Not to mention the fact that 4 of those are on the same platform, with Mario Kart just missing out on becoming the fifth million seller.

I'm surprised as 360 vs PS3 (making MM's prediction correct), but also not surprised given the NPD preview indicated this.

However that result is probably a statistical tie.

Someone should really do some stats analysis on this to decide whether the difference is statistically significant. When it comes to estimated sales you can only call a win a win if it is a statistically significant win. True 360 sales could be higher than true PS3 sales you know.

Wii-tastic.

Well i'll put it this way.

Anyone who knows anything about statistics and the kind of thing NPD does wouldn't say the PS3 beat the 360.

It's well within the margin of error.

As for the Wii numbers... seems unbeleivable to me.

GUYS WHAT DID THE PSP DO?!

no-ones revealed its figures yet

meh i just think the game doesn't deserve it =P

Also, it's illogical a sequel outsells its predecessor.

wow, 360 fans doing damage control already. If this was the other way around, there would be a seperate thread already saying "360 beats PS3". All consoles did great but PS3 beat out 360 in every region of the world in the biggest month of the yr.