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Retail

EEDAR: US November sales not a "healthy start" for holidays

Fri 11 Dec 2009 12:31pm GMT / 7:31am EST / 4:31am PST
BusinessRetailPublishing

December software sales for US could be down by 12% claims analyst

US software sales in November were not a "healthy start" to the holiday season, according to EEDAR analyst Jesse Divnich.

Although hardware sales were positive, with the Nintendo DS breaking its own record for sales and the Wii seeing the third highest sales ever for a home console, software sales still fell by 3 per cent.

Although the drop is less than in previous months, Divinch remained cautious in his outlook. He suggested that "nearly all" of the 4.5 million units of Call of Duty: Modern Warfare 2 sold prior to Thanksgiving Day were for immediate use and not bought as Christmas gifts - and therefore should not be considered as holiday sales.

Divinch also noted that core game sales were stronger in November than in previous years and that sales from casual and non-traditional gamers have begun to shrink. As a result, given that Christmas sales depend heavily on such customers, he predicts that December sales will fall by 7 to 12 per cent compared to 2008.

Also noted in EEDAR's report is that, according to Rentrak’s Video Game Ad Monitor, there were 24 per cent more software titles being offered as part of hardware bundles on Black Friday (the Friday after Thanksgiving Day in the US, famous for its retail promotions) compared to 2008.

Divinch suggests that these high value deals could have a further negative impact on software sales, even as they boost hardware numbers. He also speculates that U.S. stores could begin to regularly compete for loss-making software deals, as a means to increase foot traffic - mirroring the recent supermarket price wars in the UK for titles such as FIFA 10 and Call of Duty: Modern Warfare 2.

However, Divnich suggests that in the US the highest profile titles are unlikely to experience any price changes. "The games people avidly want will remain at full price, the games people kind of want will be discounted, and the games that do not move quickly off shelves will be heavily discounted," said the analyst. "Only the best survive."

In his final comments Divinch claims that the decision by many publishers to delay major titles until early 2010 was the right one and that they will "likely realise stronger sales with a post-holiday release than a holiday release".

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