Following the release of the July NPD data, which revealed a software sales decline of 8% but a hardware sales boost of 12%, EEDAR has chimed in on the prospects for industry growth in 2010. Although the sales trends have certainly been disappointing in recent months, EEDAR sees a light at the end of the tunnel.
"July 2010 is likely to be the last of the string of significant declines in software sales for 2010 as August and September 2010 are expected to produce stronger results," stated analyst Jesse Divnich, who cautioned, "However, single digit comparison declines are still likely."
Driving industry growth in the months ahead will be the core gaming audience, EEDAR noted. "EEDAR remains positive that the core genres such as Action, RPG, and Shooter will show robust gains this holiday season over 2009 with the release of Halo: Reach, Medal of Honor, Call of Duty: Black Ops, and Assassin’s Creed: Brotherhood," Divnich said.
Although software is always important, EEDAR believes the pivotal moment(s) in 2010 will be the launches of Microsoft's Kinect and Sony's PlayStation Move. "The Kinect and Move remain critical products that could drive growth and excitement among the casual and mainstream consumer base. The Kinect and Move’s success or failure this holiday season will be the primary catalyst for overall industry growth or decline this holiday season," Divnich said.
As for hardware, Xbox 360 and PS3 should continue to grow while Wii declines. Even so, Wii is likely to beat out the high-def consoles. "EEDAR expects hardware sales, a primary catalyst that drives future software sales, to remain strong through the end of 2010. EEDAR expects hardware units for the PlayStation 3 and Xbox 360 to show strong double digit growth, with the Wii and DS showing double digit declines. However, despite Wii’s declines compared to 2009, the Wii is still expected to remain the top selling console for holiday 2010," noted Divnich.
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August 31, 2010
"EEDAR expects hardware sales, a primary catalyst that drives future software sales, to remain strong through the end of 2010. EEDAR expects hardware units for the PlayStation 3 and Xbox 360 to show strong double digit growth, with the Wii and DS showing double digit declines. However, despite Wii’s declines compared to 2009, the Wii is still expected to remain the top selling console for holiday 2010," noted Divnich.
I thought that last sentence beared repeating. It just goes to show how ridiculously high the Wii's sales rates were from launch in November '06 until around March-April of '09. By this point Wii sales began to slide down to a level one might call "well above normal" rather than "ZOMG!". It seemed like the Wii would be in a perpetual slide until the price cut last September (I think) to $199 followed by the clearly unanticipated holiday mega-rush, which effectively depleted Nintendo's and retailers' worldwide stock levels and led to a three month shortage of Wii's in early 2010. Although the Wii does seem to have declining influence in third party software sales at this point, this generation would have suffered many more studio casualties than it has already if it hadn't been for the Wii still offering a low development cost alternative to the HD consoles.