The Pakistani Spectator

The videogame industry may be recession-resistant, but it is certainly not recession-proof, as some once claimed.

If it was, surely we wouldn’t be seeing the consecutive precipitous drops in sales reported by NPD. According to the market research firm, overall sales in the United States in March of hardware, software and game accessories were $1.43 billion–a 17 percent drop from March 2008. And in April they were $1 billion, 17 percent lower than the same period a year ago.

Two straight months of falling sales. Now, granted, March of 2008 saw the debut of Nintendo’s best-selling “Super Smash Bros. Brawl.” And the April that followed brought Nintendo’s “Mario Kart” and Take Two Interactive’s (TTWO) “Grand Theft Auto IV.” There were no similar blockbusters in 2009. So these are tough comparisons to make–at least when it comes to software.

Hardware is a different story, though, and it’s perhaps more indicative of what’s really going on in the industry. Console and handheld sales were down eight percent in April with even Nintendo’s Wii juggernaut showing signs of slowing. The company sold 340,000 Wiis in April, markedly fewer than it sold in February (753,000) and March (601,000). Sales of Microsoft’s (MSFT) Xbox 360 followed a similar pattern of decline. Redmond sold 391,000 Xbox 360s in February and 330,000 in March. And in April, it sold just 175,000. Sony (SNE) sold 276,000 PlayStation 3 consoles in February. It sold fewer than half that (127,000) in April.

Is this a trend that can be dismissed with the standard “well, software drives console sales” explanation? I’m not so sure. It’s not like “Mario Kart” has disappeared from the shelves. Indeed, it’s still a top-selling title. It’s still “driving sales.” It’s just driving a hell of a lot fewer of them.

And maybe, just maybe, that’s not because of the absence of new blockbuster titles but because we’re in the middle of the worst American recession in 50 years and $40 for a videogame is still $40.

Source: AllThingsD