--August videogame sales plunged 34% from year before
--Electronic Arts CFO says "Madden 12" selling 10% higher than last year's game
--Biggest titles set for release around holiday shopping season
By Dan Gallagher
A relatively dismal sales report for the month of August points to strong hopes among videogame makers that customers will turn out for big releases in the final months of the year.
Late Thursday, NPD Group reported that sales of videogame software in the U.S. plunged by 34% in August compared with the same month last year. The drop was largely expected, as the month saw a paltry schedule of new releases, along with the fact that more gamers are migrating to new channels online that are not picked up in traditional retail surveys.
That puts more pressure on the industry to make a strong showing in the fall -- given that retail sales still account for the bulk of big-ticket game purchases.
"Software sales are down 5% year to date, but expectations are for flat to slightly up figures for the year, with more than half of the industry's sales in the last four months," Todd Mitchell of Brean Murray wrote in a note to clients on Friday.
Doug Creutz of Cowen & Co. predicted that September sales would see "low single-digit" growth in software sales with higher growth in the fourth quarter, when the holiday shopping season kicks in.
Game stocks were largely in the red on Friday, following the release of the NPD data. Leading the decline was Nintendo Co. (NTDOY, 7974.OK), whose U.S.-listed shares fell nearly 3% to $21, down more than 40% for the year-to-date as the Japanese game maker has grappled with a strong slowdown in demand for its Wii console as well as the disappointing launch of its 3DS handheld device.
On Thursday, Nintendo said the 3DS racked up unit sales of 235,000 for the month -- nearly 80% of which took place after the company slashed the price on the device by 40% following a weaker-than-expected launch in March.
The next challenge for the device will be to capitalize on new software releases planned for the year. The company is launching "StarFox 64 3D" this weekend as well as new titles with the popular Mario and Pokemon characters later in the season, with "Mario Kart 7" expected for early December.
A major factor in the weak August sales was a shift in the release date of "Madden NFL 12" from Electronic Arts (ERTS). The top-selling football franchise typically debuts earlier in the month, but EA did not release the game until Aug. 30, which will put the game into NPD's September sales period.
In an investor presentation on Friday, EA Chief Financial Officer Eric Brown said "Madden NFL 12" is selling about 10% higher than its comparable period last year.
EA has benefited from its growing focus on the newer social and mobile gaming platforms. The company's "The Sims Social" has become the third most popular game on Facebook, next to "CityVille" and "FarmVille" from Zynga in terms of average daily users, according to Appdata.
Analysts widely expect industry sales to begin to improve in September. In addition to "Madden," big releases slated for the month include "Resistance 3" from Sony Corp. (SNE, 6758.TO), exclusive for the company's PlayStation 3 console, and "Gears of War 3" from Epic Games, made exclusively for the Xbox 360 console from Microsoft (MSFT).
The biggest titles for the year will be pegged closer to the holiday shopping season, including EA's "Battlefield 3" and "Call of Duty: Modern Warfare 3" from Activision Blizzard (ATVI), "Saints Row: The Third" from THQ (THQI) and "Assassin's Creed Revelations" from Ubisoft Entertainment SA (UBI.FR). The French game publisher is also expected to launch new titles for the Kinect motion-gaming platform by Microsoft such as "Just Dance 3."
-By Dan Gallagher; 415-439-6400; AskNewswires@dowjones.com