The torrid growth of the U.S. video game industry came down to earth in August, but the industry still eked out 9 percent sales growth year-over-year, according to market researcher NPD. It doesn’t look like it’s time to panic, but it’s clear why Microsoft just chose to cut its Xbox 360 prices.
Overall, the industry has grown 32 percent year-to-date. August growth at 9 percent would be considered great for most other industries, but for video games, that’s a slowdown. August is typically slow compared to other parts of the year, but this slowdown is being watched more carefully now because the economy is slumping.
Overall, game sales were $1.08 billion in August, up from $994.8 million a year before. Hardware was $394.5 million, up 3 percent from a year earlier. It’s quite possible that rumors of coming price cuts dried up the hardware sales, which were previously growing at much faster rates. Software rose 13 percent to $550.7 million, while accessories were also up 13 percent to $137.3 million.
In the console war, Nintendo was No. 1 with Wii sales of 453,000, down from 608,400 in July. Microsoft‘s Xbox 360 overtook Sony at No. 2 with 195,200, down from 204,800. And Sony brought up the rear with 185,400 PlayStation 3s sold, compared with 224,900 in July. The Nintendo DS sold 518,300 units, while the Sony PlayStation Portable sold 185,400 units. Microsoft was trailing Sony’s PS 3 for the past three months.
Electronic Arts cleaned up with the top three games — all versions of Madden NFL 09. (Maybe people wanted the game with the wrong cover art for Brett Favre, who got traded after the game covers were printed). Madden sold 2.3 million units, beating out last year’s title by 2 percent. Nintendo also did well with five titles in the top ten, including “Wii Fit” and “Wii Mario Kart.” Microsoft’s “Too Human” for the Xbox 360 sold a scant 168,200 units — not great for a game that was years in the making. But it came in at No. 8.
Anita Frazier, an analyst at NPD, said that the August sales were strong, but the slowdown in the growth rate was the first time in 27 months that sales growth was below 10 percent. She still expects overall industry sales to hit $22 to $24 billion in the U.S. in 2008. Sony said that year-to-date it has sold $3.7 billion in PlayStation products, up 21 percent from a year ago. Sony began shipping the new 80 gigabyte PS 3 model in late August.
Nintendo has sold 12 million Wiis and 22 million DS units this season. Microsoft said it expects to get a boost in September sales thanks to the $50 to $79 price cuts it launched last week. Over the Sept. 5 to Sunday Sept. 7 weekend, the company saw console sales increase 100 percent over the weekend before, according to Microsoft’s internal data. It noted that its year-to-date sales were $4.1 billion.