Video games sales continue to tread the negative trend in 2012, with retail video gaming software sales declining by 26% in March 2012 compared to March 2011.  The situation was worse for video games hardware sales, which plummeted by a massive 35% to reach $323.5 million compared to $494.5 million a year ago period. While Electronic Arts’ (NASDAQ: EA) Mass Effect 3 was the highest selling game in March displacing Activision Blizzard’s (NASDAQ:ATVI) Call of Duty: Moder Warfare 3, Microsoft’s (NASDAQ:MSFT) XBox 360 continued to hold the numero uno position in hardware consoles. We believe the results summarize the sorry sate of the current retail gaming industry and highlight the impact of growing digital gaming on the retail counterpart.
Continuously declining retail gaming industry
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Video games sales remained choppy throughout March, with software and hardware sales declining by 26% and 35%, respectively. While EA’s Mass Effect 3 managed to displace Activision’s Call of Duty: Modern Warfare 3 as the highest selling game, the overall lack of exciting new games was the primary reason for the decline in software sales.
The situation was far worse for hardware sales that saw a 35% drop, primarily reflected by a sharp decline in Nintendo’s Wii sales. However, the major disappointment in this division came from the newly launched PlayStation Vita. While we were of the view that the hardware sales figure may improve in March due to strong sales of PS Vita, it seems that the newly launched handheld console has fizzled down, failing to spark a turnaround. The biggest losers of the lackluster performance of PS Vita seem to be gaming retailers such as GameStop (NYSE:GME) that were holding on to high hopes from PS Vita to revive hardware sales.Notes: