The story of the games industry at U.S. retailers in 2014 is pretty clear at this point: Console sales are up because of Xbox One and PlayStation 4. Software sales are down because few people are excited about Xbox 360 and PlayStation 3 games. That continued in September.
New games sold 36 percent less at U.S. retailers in September compared to the same period in 2013, according to yesterday’s NPD report. While that might look like an enormous drop, it is better than what some analysts were predicting. That’s because September 2013 saw the release of the massive blockbuster hit Grand Theft Auto V. Even with Destiny debuting this September, few games can match the hype and sales of developer Rockstar’s open-world crime series. So that the industry did better than analysts expected is a sign that consumer spending on games is healthy.
[aditude-amp id="flyingcarpet" targeting='{"env":"staging","page_type":"article","post_id":1580556,"post_type":"story","post_chan":"none","tags":null,"ai":false,"category":"none","all_categories":"games,","session":"B"}']“Down 36 percent is actually pretty good,” Cowen & Company analyst Doug Creutz wrote in a note to investors. “[It’s] a bit better than our down 41 percent year-over-year estimate, which was driven by a very tough comparison to last year’s GTA V.”
Creutz notes that a big reason that spending was up compared to his outlook was due to players spending more on the same games.
“The [reality versus] our estimate was driven by higher average revenue per user from the Destiny and FIFA 15 special editions as well as stronger catalog sales,” he wrote.
Electronic Arts, in particular, outperformed expectations. Its sales were up 22 percent year-over-year (the NPD doesn’t share those specific numbers). That’s better than the up 5 percent that the Cowen analyst was predicting. Activision, meanwhile, was up 292 percent year-over-year due, obviously, to the release of Destiny. But that was below Creutz’s estimate of up 353 percent. But he thinks he knows why that happened.
Destiny’s standalone sales missed expectations by about 15 percent, but Cruetz doesn’t think that means the game didn’t sell well. Instead, he thinks more people bought it digitally or packed in with a new PlayStation 4 than he originally was expecting.
That shift to digital won’t just impact Destiny.
“We expect the shift to digital distribution of full games on next-gen consoles to be a meaningful drag on NPD-reported sales in Q4,” wrote Creutz.
The NPD Group only tracks the sales of physical games at U.S. retailers, so if more people are buying games online, that could make sales appear more sluggish than they actually are. NPD says it intends to start tracking digital game sales soon.