May 14, 2010, 7:38 AM — The video game industry took a pounding last month, according to the NPD numbers released yesterday (Gamasutra has a detailed breakdown of the numbers). Overall, April 2010 sales were down a whopping 26% as compared to April 2009. This was the fourth largest drop since NPD has been tracking these numbers, and what makes things look worse is that two of the three worse months were June & July of '09 (with September 2000 being the third). Having three record-breaking drops within a 12 month span can't be good news. Overall for 2010 the industry is down 11% from Jan-April 2009. That's not painting a rosy picture for the 'recession proof' video game industry.
NPD analyst Anita Frazier says part of the steep drop in April was due to the timing of Easter (which fell on April 4th). Since Easter was so early in the month, a lot of Easter gift buying was done in March (people give video games as Easter gifts?). Ars Technica points out that the Nintendo DS accounted for 71% of the drop in hardware sales, and yet still managed to sell more units (440,800) than any other system.
The Nintendo DS drop isn't surprising given two facts. First, that Nintendo has announced a new 3D DS is coming soon, leading people to wait for the newer version. Second, the inroads that the iPod Touch & iPhone are making into the portable gaming space. Plenty of adult gamers now leave their DS at home since they can get their gaming fix on their iPhone, and the iPod Touch is becoming the must-have tech toy of the younger generation. Nintendo president Satoru Iwata has targeted Apple as the "enemy of the future" and for good reason.
As for the rest of the industry, to be fair April didn't have a lot of blockbuster releases; May is looking better and hopefully the industry will bounce back nicely, starting with Rockstar's GTA-in-the-old-West title Red Dead Redemption shipping next Tuesday.
And then next month we have E3. Microsoft recently sent out invitations to its Project Natal event, scheduled for the Sunday before E3 and featuring Cirque du Soleil. Sounds like it'll be quite a media event and Microsoft needs it, as excitement over Natal seems to have cooled quite a bit among the gaming press (and gamers) that I know.
Also at E3, Nintendo will tell us all about the Nintendo 3DS (a working title, we've recently learned), and today brought a fresh rumor that Sony, whose portable system the PSP has been selling very poorly lately, will reveal a PSP Mark II at the show. Speculation on what that actually means is all over the place, from a PSP-phone to nothing more than a bump in speed and graphics capabilities.