News

Video game sales down 5% in January

Posted by: Chuck at 2/14/2006 12:00 PM
According to Reuters, video game sales were down 5% last month, continuing a five month streak of declines over previous years.  If you contrast this to the fact that the US retail sales were up big last month you might think the industry is having issues.  This picture grows even dimmer when you factor in the recent layoffs at EA and Activision, the fact that game companies are missing their earnings estimates and that Atari is nearing bankruptcy again.  Does this mean that the industry is in a slump?  Should we start to predict another downturn for the gaming industry?

Absolutely not.  Look at what games were released over the last month and a half and you have your answer as to why the industry is having issues right now.  What big, must have game has been released in that period?  None (unless you are DS fan or a big fan of the DOA series).  The industry as a whole is in one of those big quiet periods where games are being wrapped up and prepped to ship (the recent layoffs are proof of that as you normally don't let people go who are actively working on a project).  Looking at the rest of the year I think we have a chance to repeat or exceed the success the industry had in 2004.  There are a ton of great games coming in the next few months and we still have the launch of two more consoles this year.  I'm guessing we'll see things starting to pick up in March and pick up momentum towards the end of the year.  Until then it will be fun watching all the crappy blogs and analysts predict the death of the industry.