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Controller Freak

Chad Sapieha leads you deep into the world of games, covering gaming trends

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NPD reports first decline in game industry since 2002 Add to ...

The video game industry, it would seem, is not invulnerable to the weakening economy. According to research firm NPD, first quarter Canadian retail sales of video game hardware and software shrank by 8.5 per cent over the same period last year. This is the first time quarterly sales have declined year-over-year since the firm began tracking the industry in 2002.

That said, NPD Group Manager Matthew Tattle pointed out in a press release Monday that these numbers do not necessarily indicate that the industry is experiencing fallout from the global economic meltdown.

"It may be tempting to attribute the decline in sales to the current state of the economy," said Mr. Tattle. "However, on closer inspection, the first quarter of 2009 lacked the number of blockbuster titles that drove sales during the same period last year.  Guitar Hero and Rock Band experienced very strong sales in early 2008 while the release of Super Smash Bros. Brawl helped bolster overall first quarter sales for the category."

Fair enough. Still, there were a few blockbuster games in the first few months of 2009. The Xbox 360's Halo Wars sold over a million games worldwide in under three weeks, and Street Fighter 4, Killzone 2, and Resident Evil 5  were no slouches, either; the first has sold two million copies globally to date, the second 1.5 million, and the third nearly four million (according to game sales tracking web site VGChartz).

What's more, NPD's own research shows that the areas of greatest decline were not in software, but hardware. Portable hardware was down 21 per cent and console hardware decreased 14.5 per cent, whereas sales of portable and console software shrank by only 1.5 and 7.5 per cent, respectively.

Still, it seems prudent to hold off on pronouncing the game industry to be in full decline. One off quarter doesn't necessarily indicate a trend.

That said, don't expect much better results for the second quarter. The months of April, May, and June 2008 saw the release of the phenomenally successful Grand Theft Auto 4 as well as the extremely popular PlayStation 3 exclusive Metal Gear Solid 4 . There's nothing coming out in the same time frame this year that can hope to match the success of either of these titles.

On the bright side, declining sales could be just the sort of kick in the pants the hardware makers need to instigate price cuts-particularly Nintendo, which hasn't reduced the cost of the Wii since its introduction two-and-a-half years ago.

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