Wedbush Morgan blames Xbox 360 "supply/demand imbalance" and lack of GTA-level blockbusters for year-on-year software dropoff.
The NPD Funworld numbers aren't out until next Thursday, but that hasn't stopped the leading lights of the game-analyst world from getting their market-prognostication on. First out of the gate was Wedbush Morgan Securities' Michael Pachter, who predicted that $715 million in game software was sold in North America in November 2005.
While that may seem like a kingly sum, it is in fact a 16-percent drop from November 2004's $849 million in software sales. That month saw a slew of wildly popular releases, including Halo 2, Half-Life 2, and Metal Gear Solid 3. It also came only three days after the launch of the second-highest-grossing game of all time, Grand Theft Auto: San Andreas.
November 2005 did see a number of high-profile current-gen releases, including Tony Hawk's American Wasteland, Star Wars: Battlefront II, WWE SmackDown! vs. RAW 2006, Mario Kart DS, Prince of Persia: The Two Thrones, and Half-Life 2 for the Xbox. However, with the exception of 50 Cent: Bulletproof and Gun, hardly any were original properties. This worries Pachter, who is "concerned that consumers are uninspired by the sequel-driven slate of new games released this quarter."
What about the Xbox 360 launch, you say? Pachter counter-intuitively says that the launch of the next-gen console is actually a factor in the lagging game sales, "in part due to a supply/demand imbalance for the Xbox 360." That said, 360 games such Perfect Dark Zero, Call of Duty 2, and Project Gotham Racing 3 dominated the NPD console charts during the last week of November, meaning the final numbers might be less gloomy.
As for individual publisher's fates during November, Pachter predicts that Electronic Arts will come out on top with $125 million, down 6 percent from the same period last year. Far behind on the analyst's list is Activision with $65 million, a modest 3-percent increase over last year. THQ is pegged to get the bronze, with $40, a 44-percent decline thanks to an absence of Pixar movie tie-in titles.
According to Pachter, Take-Two Interactive will take fourth with $30 million--44 percent below its San Andreas-bolstered November 2004 take. Behind it will be Atari with $25 million (+2 percent) followed by Midway and its $12 million haul (+15 percent). Bringing up the rear of Pachter's list is Majesco and its paltry $4 million take, a whopping 71-percent decrease compared to last year.
But while informed, analyst notes are not infallible. In fact, Wedbush Morgan's November report admits that its previous report was overly optimistic. "Our most recent forecast predicted US console and PC software sales growth of 6 percent for 2005, and we now acknowledge that our forecast is too high in light of the weaker-than-expected October and likely weak November sell-through data." The company now expects overall 2005 sales to be "flat to slightly positive."
Wedbush Morgan also estimates that, as of October 2005, there are 86 million total current-generation consoles and handhelds in the US. Speaking of current-gen machines, the report also said to look out for a PlayStation 2 price cut early next year.
I agree with everyone who says that gamers want new game experience that would shock and aw everyone.
New games are always a risk for game companies. You may get a hit, but maybe you won't even cover the production cost. So it's much easier to just make sequels of a hit game. Everyone will buy it, and it doesn't have to be good, as long as it's got a famous name. Series almost always go bad. Typical examples: Tomb Raider and Need For Speed. The decline in quality is obvious. But the fault lies with us gamers, not computer companies. They are out there to make money, not art. Because that is what a good game can be. It is up to us, to ignore the urge to buy a game just because of it's title. Basically we need to get educated. All of us. PC, PS, XBOX players, everyone should show some self control and skip a bad sequel, save your money and support people who make original games.
We want new game. We want new games. We want new game. We want new games. We want new game. We want new games. We want new game. We want new games. We want new game. We want new games. We want new game. We want new games. We want new game. We want new games. We want new game. We want new games. We want new game. We want new games.
This is the phase of passing from one generation of gaming to another.It is to expected that companies(Microsoft,Sony,Nintendo) focus on getting the new consoles ready.
Here's another angle. Perhaps the desire to go to the next generation of consoles coupled with the high cost of a flat panel LCD, plasma, or DLP television is another reason for the slump. Gamers might need some time to get enough cash to leap into the hd era of console gaming so they don't have the information loss that comes with SDTV.
People, stop being spoon-fed. Sequels are imperative to the industry. Just because bad sequels exist doesn't ruin the entire premise. More of the likes of Zelda, Halo, Metal Gear and Half Life must be a good thing, right? Just take the good with the bad, and don't buy what you don't want. Hey, you've got the right, right?
Why has no one mentioned the enormous amount of DELAYS!! I have been a dedecated Sony PS guy however; I really wanted to play games like ECKO's Getting UP, JAWS, The Godfather ect all delayed until Q1 06 or something. I feel a little cheated by this as all of the sites and game magazines had these titles listed in the usual OCT NOV stampede of games. I think some developers were afraid of clashing with the 360 but come on only a select few people would really be playing that system. And as for the PS3 I am sure this is vaporware right now (only the SONY engineers dream) and I think those waiting for a summer release will be heart broken. This date is artificial and put there to give you hope. Pre-orders maybe, but a system? NAH! Who would launch a Major system in the summer when most people are planning vacations and outside activities. I can guarantee they would wait 4 more months for an OCT NOV release to cash in on holiday spending and give more time for sneak previews and HYPE. and that is even IF the unit is READY-With the recent DRM crap Sony has been pulling, and BlueRAY not being accepted by M$ and DVD ROM makers as a standard (HD-DVD instead) I am afraid I will jump the ship to the 360 this spring when I get my first HD TV. Please give me some feedback all of the longtime PS1 PS2 people....
A drop in sales would be nice if it caused the industry to really stop and think about why sales were down, but instead I think it will cause them to become more cautious and just release games they know will sell well. You know games like Madden, NFS and GTA. I'm sure their thinking will be something like "why take a chance on a new idea when we can just update the roster in Madden and sell a million of them". Pretty sad really. Sequals in and of themselves aren't bad, the enemy is the trend in the industry to go for the tried and true while forsaking the new and interesting.
I think the mainstream wants new expieriences more than anyone else. If you look at japan an see how nintendo is consistently taking over the top 10 in the sales charts it is pretty much the proof you need. Here in america people haven't really realized what they want out of games so we will continue to get tomb raider 19, mario party 82, grand theft auto: new lame city so on and so forth. it can only go on for so long before most people are tired of it and it is starting to show.
See the problem with original games is if they are any good, they turn it into a series, since there are a hugh group of people already in love with the game, they will definatley get it and it will also get a lot of hype
IM SICK of TONY HAwk!!! No MORE PLEASE GO AWAY. NO More Spiderman games and no more dumb titles that just waste our time and MONEY. Too many sequels we need something new!!! i used to buy about 2-3 games amonth now its been 4 months and no game because their nothing good, besides the current Gen consoles are getting old and cant keep Up, Im moving on...... x b o x 3 6 0!!
It's pretty funny: Take away the 14 or so sequels, and you'd only have 4 original games (Condemned, Gun, Kameo, Peter Jackson's King Kong) for the Xbox 360 at launch, one of which is a licensed movie game. We can only hope that the next-gen really won't have sequels outnumbering original games 3 to 1 or more! But it's not just consumers which love sequels: Check out Gamespot's most recent top 15 rated games for each console, and you'll only find four original titles for the PS2 (Guitar Heroes, Psychonauts [which sold obscenely poorly, coincidentally], Shadow of the Colossus, and the Warriors), two for the Xbox unless you consider Ninja Gaiden Black an original (The Warriors and Sid Meier's Pirates!), and five for the Gamecube (Battalion Wars, Killer7, King Kong, Mario Superstar Baseball, and Geist). So critics, no matter what they may say, lap up sequels as well. This isn't to say that sequels can't be great -- it's far easier (and less expensive) to create a solid, polished game from an existing, proven license, backstory, gameplay mechanic, and engine -- but then you have to deal with the slippery slope of when developers and publishers will *ever* take a chance on something original. Ultimately, though, what speaks loudest is your wallet, rather than anything you say through your mouths or keyboards.
Question- What is it with the Xbox360?! I don`t say I hate Microsoft`s Xbox360, but their High Demand for it kicked back not oly in EBGames but in lots of stores FFVII Advent Children was delayed until January 2006 thanks to the X360 and I`m not sure if you guys noted this but there already is a buttload of game already preannounced for X360, and basically no official PS3 or NR release date. Anytime this year Sony and Nintendo... Also, the X360 because of its wordly show-off, nobody seems to care a lot bout the game just the HD resolution graphs that crud has, and sales wouldn`t have lowered if it weren`t for the X360, if Zelda or FFVIIAC had come out in november sales would have been a lot higher rather than focusing on X360, I know its next-gen, but this is just stupid.
Stop the sequels and create new and interesting games with new content and adventures... it's getting kinda repetitive out there.
The whole shortage of Xbox 360s just ticks me off. I would have tried to get one by now, except that everybody's sold out! Why can't Microsoft make enough consoles to fit the high demand. If that was the case, games like Perfect Dark Zero and Kameo: Elements of Power would be selling a lot better. Not only that, but several blockbuster titles (Oblivion, Twilight Princess, Black) were delayed until next year. Developers shouldn't release rushed garbage, but they also shouldn't take too long to put out a game *caugh*Blizzard*caugh*
The problem - too many crappy console sequels. The arrival of the much-vaunted PS3 will probably only exacerbate the problem too, unfortunately. Perhaps Nintendo will be able to provide some original, fun titles and the PC always hold some promise of new and interesting games.
Come on people, that sequel argument is BS. While I'm tired of sequels myself, Exaspenite got it right. If sequels weren't around then I think the game industry would be in a lot more trouble than these sad analyst say. Think about it, how many new, good properties become big sellers? Not many. I got a 360 and my favorite game is Condemned. You think it's going to sell well? Not really. Will it get a sequel? I doubt it. Name the best selling games in the USA or Japan and they are all sequels. And look how happy people are about the sequelstation 3. So far the games people are most excited about are sequels. MGS4, Devil May Cry... LOL, I can't even think of an original game that has been announced for that system. Well, we saw Fatal Inertia and that looks crappy for now. But you see my point. Orignal games have to stand out to become a hit, and as prices for development go UP, less companies can afford to risk all that money on an original property that isn't garanteed to be a hit. This is why you see the sequels. And if sequels didn't move games and systems there would never be a Halo 2 or a MGS4.
I don't know about everyone else, but I just haven't had the time to play video games lately. I haven't played a new game in 3 months.
I agree I like original games with lots of replay potential as I too can only get games for myself very infrequently. The Xbox 360 while it looks great and the games I have seen look worth playing it stills doesnt have appeal to me for the price .As for the downturn in game sales, I feel game sequels are done to death new ideas like God of War and Gun seem to have more appeal to me.These fresh ideas are a surprise to the player and makes game play seem fresh instead of the same old thing. Also Veratronator, You need to get a wife, house payment,a couple of car payments , and have kids of your own and explain to me this money thing you have in abundance again.
The main reason I'm not buying as many games as I used to is cause I'm currently setting aside most of my extra money for a PS3. I think allot of people are in the same boat as me, I'm not rich so if I want a PS3 at launch I have to start saving now and that means less money for games that come out now.
Last year was an anomoly of HUGE games. But the thing about sequals not selling is a bunch of crap. All the blockbuster games released last year this time were sequals; Halo 2, Half-Life 2, MGS 3, GTA:SA (i know, not technically a sequal). The years sales have returned to a normal level after last year's spike. Also, the price of games is getting too high. It's $60 for a 360 game, $50 for a current gen. I find that when a good group of games comes out, i can either buy one title and hold off on the rest, or wait fot the games to get a price reduction/used game bin. Most people dont have $200, 300, or 400 to spend on a group of games at one time. Especially when you've got bills to pay and school loans to take care of.
"Gamers want new experiences, not sequels." Don't the numbers prove otherwise? Like the article noted, 2004 was driven by big-name sequels: Halo 2, Half-Life 2, Metal Gear Solid 3, and most notably, GTA: San Andreas. It's just that none of the current year's titles smacks of "must-have" status to the mainstream consumer, for better or worse. I love new properties and experiences as much as anyone else, but it's an undeniable fact that franchises and sequels sell, and sell a lot. More so, in fact, than original titles. Take a look at the top ten (or eleven, since Super Smash Bros. Melee ties with Kingdom Hearts at spot 10) selling titles for the current gen and you'll see that only two of the 11 are original properties: Kingdom Hearts and Halo. The rest are, unsurprisingly, all sequels: 1. Grand Theft Auto: San Andreas (12 million) 2. Grand Theft Auto: Vice City (12 million) 3. Gran Turismo 3: A-Spec (11 million) 4. Grand Theft Auto III (10 million) 5. Gran Turismo 4 (8 million) 6. Metal Gear Solid 2: Sons of Liberty (7 million) 7. Halo 2 (7 million) 8. Final Fantasy X (6.6 million) 9. Halo: Combat Evolved (5 million) 10. Kingdom Hearts (4 million) 10. Super Smash Bros. Melee (4 million) I personally don't care for GTA-style free-roamers myself, but you can bet the numbers would tell a different story if GTA: Next came out this year, since the franchise sells a bajillion copies each time. P.S. Calling San Andreas the second-highest grossing title of all time is a bit deceptive since Super Mario Bros. and Super Mario World, which sold 40 million and 20 million respectively, are technically classified as bundled games which sold together with their respective systems.
Like every one has been saying. There just isn't any originality in games any more when you think about. Seriously originality died with the dreamcast..all the games on that system were orginal really when you think about it.
I agree with Nemesis. Gamers (such as myself) are tired of sequels, remakes, rereleases, movie games, etc. We really could use some original stuff to really push the market. Although Guitar Hero has to be one of my absolutle favorite games in a while, and it's well worth the $70 price tag. But more innovation is needed. I thought the Xbox 360 launch was weak, littered with sequels, rehashes, and sports titles that bored me. CoD2 I can get for PC which is the only great game (IMO) for the 360. I'll wait till something amazing comes out for the 360 to plunk down $400.
Yea i want to play some new games and if the prices were cheaper i would bye more $50 for a game is expensive and iam no bill gates so i can only get a new game about every month if anything good is even out plus the games i been playing are fairly old like halo 2 on xbox live and battlefield 2 has contributed to my not buying anything lately most people want a game with alot of replay value.
It just seems to me that there aren't as many BIG game titles like there were at this time last year. What do you think the numbers would reflect if Zelda, Metroid Prime Hunters, and The Godfather were in the mix like they were originally slated?
I would attribute the slow in sales due to the lack of good titles, and sequels. But if they lowered the game prices to like, 40 bucks I would buy two games instead of thinking of buying one.
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