NPD Reports Grim Game Sales In May

NPD Group, the firm that has been tracking game industry sales for many years, would normally have reported the May sales figures last Thursday. Because of E3, NPD delayed release of the numbers until Monday, which was a good idea given the grim numbers. NPD reported that game software sales (the combined sales of console, portable, and PC software) at U.S. retail stores dropped 44 percent in May compared to May 2012. Last year, May saw $517 million in total sales, and this year the amount dropped to $386.3 million.

The news was somewhat better for hardware, since sales of video game hardware only dropped 31 percent (from $139 million to $96 million), while accessories turned in a stellar showing by only dropping 6 percent over last year (from $122.5 million to $115.3 million). Notably, this May accessories were outselling consoles.

The top 10 games (counting only physical copies sold at retail) were led by Injustice: Gods Among Us from Warner Brothers Interactive, while Call of Duty: Black Ops II was in second place. Donkey Kong Country Returns was number 3, showing the strength of 3DS software. “Nintendo 3DS software unit sales were up sixty percent versus May ’12, and when looking at the game ranking based on SKUs, there were three 3DS SKUs in the top 10,” noted NPD.

NPD added some additional information in their remarks, noting that these sales numbers were roughly 50 percent of the total consumer spend on games. “When taking into account our preliminary estimate for other physical format sales in May such as used and rentals at $91 million, and our estimate for digital format sales including full game and add-on content downloads including micro-transactions, subscriptions, mobile apps and the consumer spend on social network games at $339 million, the total consumer spend in May is $787 million,” said The NPD Group’s Liam Callahan.

The explanation for the decline was, according to NPD, is a lower neumber of new titles and the comparison with Diablo III last year, which was selling strongly in May. “Softness in new physical entertainment software sales stemmed from a decline in the number of new launches, with over 30 percent fewer new SKUs, as well as poor performance of the new SKUs that were released. New SKUs generated over seventy percent less units on a per-SKU basis, and a decrease of over eighty percent revenue per SKU,” noted Callahan.

It is important to note that NPD’s estimates of non-physical game sales do not have the same degree of certainty found in the retail numbers. A handful of companies account for almost all the physical retail sales. By contrast, the number of companies selling digital games is vast, and most of them are not public companies — hence not likely to reveal confidential sales information.

Still, it’s perfectly clear that retail sales of boxed games are in decline, and have been since the high point of 2008. The industry is looking to new consoles, as well as price cuts on old ones, to revive sales of consoles and games to the previous high point. Certainly that would be great for many companies, but most analysts seem to agree that consoles sales are unlikely to reach the previous heights. They are now too many alternative ways for gamers to get their gaming fix, whether it’s on a PC, mobile or online. There are also a growing number of free-to-play games, and tablets at reasonable prices (comparable to consoles) that can be used for a variety of functions besides game playing.

Don’t expect sales at retail to turn around any time soon. When Grand Theft Auto V ships in September, then you can logically expect a good sales month. The rest of the year from that point will be loaded with new consoles, a dizzying array of software, and a tremendous marketing spend aimed at driving people into stores to buy all these marvelous things. There will be a solid lineup of exciting things to buy; the only downside appears to be more competition for the game buyer’s dollar, and the purchase of a $400 or $500 console may leave them with less to spend on games.

Rumor Has It Facebook May Add Video To Instagram

Facebook invited members of the press to its Menlo Park headquarters to “learn about a new product” this upcoming Thursday. The rumor is that this new product might be a video feature for its photo-sharing platform Instagram.

According to the social network’s invitation, a “small team has been working on a big idea,” and TechCrunch reports that video support on Instagram, which Facebook acquired for a cool billion dollars last year, just might be that “big idea.” It’s no surprise the largest social space would move in this direction given the ever growing popularity of Twitter’s Vine.

Brands are increasingly seeing the value in using the app to send out short and sweet six-second messages associated with their products to a broad audience.  An even bigger incentive comes from Topsy Analytics, who recently reported that Vine has surpassed Instagram in total Twitter shares. Additionally, fun fact, this milestone occurred just one day after an Android version of the Vine application was released.

A slightly less-likely rumor connected to the press event on Thursday is that Facebook has been working on a news reader to fill the void created once Google Reader closes its doors early next month. “It could be a sort of ‘trending articles on Facebook’ feature, or a more full-blown RSS reader-style product,” TechCrunch explains. The news outlet also adds that it’s possible that this Facebook product won’t be announced until further in the future, well after Thursday’s press event.

For the big Instagram rumor users and advertisers will have to wait until 10 a.m. Pacific this Thursday to find out what Facebook’s really cooking up.

What do you think Is a video feature the right move for the filtered app Would this clutter the platform or enhance the user experience Let us know in the comments below.

Source: TechCrunch

Companies Growing Faster On Twitter Than Facebook

According to social analytics startup Optimal, large brands are growing in popularity faster on Twitter than they are on Facebook. The site’s data followed 4,330 brands over the course of a week. When the week started, the companies had 3.49 billion collective Facebook likes and 595 million Twitter followers, and by the end of the week they had gained 18.5 million new likes and 4.5 million new followers. These numbers represented a higher growth percentage in Twitter than Facebook for these brands.

While the growth by percentage was much higher on Twitter, the actual number of likes on Facebook is still much higher than followers on Twitter. There are some brands that do better on Twitter than Facebook, but they are the exception. That said, both Facebook and Twitter have become very important tools for social advertising. It was recently reported the the benefit from Twitter alone could be up to 2 percent of a brand’s revenue. It is quickly becoming apparent that Twitter has etched a place in marketing.

Source: TechCrunch

Oculus Rift Gains $12 Million In Funding For Consumer Release

Oculus Rift, the designer of the Oculus VR device, have raise another $16 million from venture capitalist firms Spark Capital and Matrix Partners. This new funding will help to bring the VR device to the hands of consumers, as the company begins to transform working prototypes into production-ready devices. One year ago, the Kickstarter campaign for the Oculus Rift raised $2.4 million to bring the device to game developers so they could begin to design games for the device. Today, through showings at PAX and E3, the device has garnered tremendous support and buzz from gamers. Even at E3 last week the device made a successful showing.

With this new $16 million funding, hopefully the device has begun to make the approach to consumers’ eyes instead of just the eyes of developers. Developer units for the device were shipped earlier this year. There is no set release date for the device yet, but the developers are aiming for a 2014 release with this new funding supporting it. No retail price has been set as yet, but Oculus Rift is aware that the lower the price the broader the potential market.

Source: Polygon

Game Developers Of Thrones

Now that the third season of Game of Thrones is over, we need something to keep us going until next year. How about our own industry, cleverly re-imagined as Houses from the hit series The parallels are closer than you might think.  Here’s a selection of them from the clever infographic put together by Gamefront.com.

Source: Gamefront.com

Digital Game Sales For May 2013

SuperData released data for top digital game sales in May 2013, which we’re running as part of a monthly column on [a]list daily.

Joost van Dreunen, co-founder and CEO of SuperData, provides insight for the report.

Consistent with seasonal spending on interactive entertainment, gross revenues for digital games bottomed out in May and totaled $808 million across all categories. Consumer spending continued its overall downward trend as the industry readies itself for major announcements on both the hardware and software side of the business.

The two segments that performed best in May were social games, which gained four percent [month over month] and totaled $124 million, and subscription-based MMOs, which increased seven percent [month over month] and totaled $88 million. Both categories are least affected by seasonal changes, unlike the DLC segment which saw a drop of eight percent to $270 million.

Social Games

After several months of decline the social games category experienced a slight increase as revenues reached $124 million in May. While the addressable audience, expressed in monthly unique users, continued its decline, both the overall conversion rate and spending were up month-over-month.

King’s Candy Crush Saga maintained its lead with an estimated 36.7 million monthly actives throughout the month of May. The average revenue per paying user for social games (across all categories) was $34 in May.

Free-to-Play MMO

With conversion rates now consistently above 15 percent across all categories (browser- and client-based), the free-to-play MMO segment is showing its resilience and strength as a growing market. Overall F2P MMO revenues totalled $181 million in May.

The decision by Trion Worlds to have RIFT make the switch to free-to-play suggests growing faith among key publishers in this monetization scheme, and offers a wider audience of gamers access to top quality content.

Pay-to-Play MMO

After last month’s widely published decline of the subscription-based MMO market, May showed welcome signs of recovery. Overall player numbers stabilized at 6.6 million and gross revenues climbed back to $88 million for the month.

Whether this uptick means a reversal of the pay-to-play segment remains to be seen. Especially titles using a hybrid monetization method, offering a combination of subscription and micro-transactions, increasingly carry the overall segment.

Mobile

The mobile games segment showed a slight contraction after last month’s record-breaking ARPPU of $12. Fortunately, conversion rates were up and reached 5.36 percent across all game categories in May. Overall, the mobile games segment is starting to show signs of becoming a saturated market as overall audience growth levels out.

There were no new surprises at the top of the market, as Candy Crush Saga (King), Clash of Clans (Supercell) and Marvel: War of Heroes (Mobage) continue to dominate. Title-level revenues, however, have clearly declined since their initial heyday. We expect that the ongoing dominance of only a handful of titles may, especially on the long term, reduce publishers’ willingness to invest in innovative game design.

Downloadable (PC + console)

Consumer spending on DLC content contracted by more than eight percent. This is unsurprising as the market generally slows right before major announcements. More so than any other console cycle, publishers are entering a year in which the release of expansion packs is closely tied to the launch of major titles and platforms.

Overall DLC generated $270 million in monthly sales with Metro: Last Light (Deep Silver) and Resident Evil: Revelations (Capcom) leading the charge in May.

 

About the Author

Joost van Dreunen, Ph.D., is CEO SuperData Research, a market intelligence provider specialized in online games. He has written extensively on online audiences, monetization strategies, virtual goods, social games, free-to-play, online gaming and entertainment.

Animal Crossing Sets eShop Sales Records In Japan, U.S.

Sales records for Nintendo’s digital eShop were broken last week with the release of Animal Crossing: New Leaf. More than 4 million copies in Japan alone were sold over Nintendo’s eShop service. Nintendo has increasingly been pushing consumers to begin using the service to purchase games more often, as some of Nintendo’s games like Animal Crossing and Fire Emblem: Awakening were difficult to find in retailers at release in the U.S.

The game allows players to become mayor of their own virtual town and live life in this new world, playing the game and interacting with their townsfolk as they see fit. Players can also interact with other players by exchanging Friend Codes. Upon Animal Crossing’s release in the U.S., eShop sales had increased by 4 times from the previous week, selling 40,000 units a week.

As Nintendo’s digital distribution service gains more popularity, the 3DS may be seeing an increasingly digital future that helps drive hardware sales. Nintendo is discovering the value of never being out of stock with a product, though users are having to worry about the amount of space available in their 3DS for downloaded games. The game has even inspired a special edition of the 3DS XL, as Nintendo uses the game’s popularity to help sales of the more profitable version of the 3DS.

 

Source: GI.biz

Apps Should Be Optimized For iOS 7

While Apple isn’t making it a requirement to update apps that were available for iOS 6 to be optimized for iOS 7, the difference in look between versions will be abundantly clear. A number of features of the operating system have been altered in the change to version 7, and these changes will clearly be reflected in apps that are upgraded to meet the specifications of the new operating system.

The difference between an optimized app and an un-optimized app will be comparable to having a non-Retina app running on the Retina display, according to app developer Entropy Labs. In other words, an un-optimized app will look clunky. For games this won’t be as much of an issue since usually much of the interface for games is down within the game’s style. Still, the app icon may be an issue, and developers will want to look at some of Apple’s apps for design cues. Before the release of iOS 7 sometime this fall developers should make sure their apps are ready both design-wise and functionally.

Game developers will want to add support for game controllers (where applicable) through Apple’s new controller API. With some 1500 new APIs introduced by Apple for iOS7, it will take some time to determine which ones developers need to use in a particular app. It’s going to be a busy summer for app developers.

 

The Division Trailer Shows Shows How Black Friday Ends the World

The reveal trailer for Tom Clancy’s The Division tells a what-if story based on a real-life military operation called Dark Winter. What if our world’s infrastructure was shut down one piece at a time because of a disease What would it take to put it back together The Division hopes to answer these questions in RPG form upon its (unannounced, but probably 2014) release.

 

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Dragon Age Inquisition E3 Trailer Shows How War Ravages Ferelden

The newest iteration of Bioware’s Dragon Age franchise has finally been revealed in a trailer released during EA’s E3 press conference. The trailer shows off the desolation and destruction that comes with a world torn apart by war between nations and a new enemy. It all culminates in the return of a familiar face in the form of the mage Morrigan who was an integral character in the first game.