VIDEO GAME INDUSTRY WATCH
Game Sales Sputter, 'GTA' Fails to Steal the Show

It's been a tough week for the gaming industry. NPD reported a 17 percent decline in console video game sales for March, and the "Grand Theft Auto IV: Chinatown Wars" debut was not so grand.

Activision's upcoming "DJ Hero" stirred up legal issues, while "Fallout" developer Bethesda Softworks got busy with a new addition to the franchise.

Out Like a Lamb

While game sales in the U.S. may have once appeared impervious to the recession, making double digit gains despite declines in other forms of entertainment, March took its toll, according to sales figures from the NPD Group.

Though it began the year with a roar, the video game industry seemed to have a thorn in its paw by March, with sales dropping in every category -- from consoles to accessories -- compared to March 2008. Overall sales for the month declined to US$1.43 billion from $1.72 billion a year ago, a 17 percent loss.

Hardware sales took the steepest hit, with sales of $455.55 million, down some $100 million from last year, a drop of 18 percent.

Software sales declined by the largest dollar amount, dropping to $792.83 million last month, compared with $952.14 million in March 2008, a loss of $159.31 million dollars.

Accessory sales dipped 15 percent to $185.67 million, from $217.55 million a year ago.

One contributing factor to the slower sales was the Easter holiday. In 2008, Easter fell on March 23, and the weekend's sales contributed more than $100 million to March numbers. This year, Easter fell in mid-April, and the holiday sales will be reported with April's totals.

"You might not think that Easter is that big of a gift-giving holiday, but our consumer data shows that 8 percent of industry unit sales were purchased for the Easter occasion in March 2008, accounting for $121 million of that month's sales," said Anita Frazier, an NPD analyst. "We expect that most of Easter sales this year fell into the April reporting period, and we'll see that reflected in next month's data."

It's not likely that the video game industry is the latest sector to fall victim to the financial downturn, Frazier said.

"While it might be tempting to jump to the conclusion that the sky is starting to fall on the video games industry, given this months results, it's important to remember that two very big things are different this year than last: Last March included the release of 'Super Smash Bros. Brawl,' which went on to become the fourth best-selling game in 2008," she noted.

Too Grown?

Whether it was the missing Easter holiday or a miscue, Take-Two's launch of its first Nintendo DS title, "Grand Theft Auto: Chinatown Wars," was less than stellar.

In its first two weeks on sale, the game sold just 89,000 copies, according to NPD Group. With more than 26 million of the portable gaming devices in circulation, that number is certainly not impressive.

The problem could be the game's "M for mature" content rating -- possibly too mature for most DS owners.

In the U.S., less than 10 percent of the devices are owned by men aged 18 to 30, which is the game's target audience, Michael Pachter, a Wedbush Morgan analyst, told the E-Commerce Times.

"There may be a lot of adults who own DS hardware, but look at the ads: America Ferrera, Liv Tyler, Beyonce [and] Carrie Underwood are all targeted at teen girls or women," he pointed out.

"It's pretty clear to me that the 'older' DS demographic is largely female, and that they play brain training [games], 'Nintendogs,' and 'Rhythm Heaven' -- not 'GTA: Chinatown Wars,'" he continued.

"There's no point making games for an audience that is not there. Given that 'GTA: CW' was the highest-rated DS game of all time and had a ton of name recognition, we can't say that Take-Two made a bad game or marketed it poorly. Instead, they created an M-rated game for a largely E (Everyone) and T (Teen) audience, and those DS owners who are legally allowed to buy an M-rated game are not particularly interested," concluded Pachter.

Finally, the post-apocalyptic nightmare that is the "Fallout" franchise will make its way to Sin City. Bethesda Softworks has announced a follow-up to its hit "Fallout 3," which was released last fall. "Fallout: New Vegas" will hit store shelves in 2010.