Analysts warn of substantial decline ahead of July NPD release

Analyst firm Cowen & Company is predicting that tomorrow's NPD Group will confirm that July was the worst industry sales month since September 2005.

5

The July sales numbers from the NPD Group are due tomorrow, and some analysts are already warning that the figures are likely to be dismal. The firm Cowen & Company predicts sales of $317.5 million. This would be a 27% year-on-year sales decline, the worst since September of 2005.

The one ray of sunshine in the expected poor report is NCAA Football 12, which is estimated to have sold 770,000 units -- an improvement of 11% over last year's installment.

"Otherwise, we believe there were no new releases in July that exceeded 200K units; combined with what is likely to be a poor follow-through from the disappointing June release slate, we expect July sales to decline significantly," wrote analysts Doug Creutz and Jason Mueller, as reported by Gamasutra. Creutz expects August to be even worse than July, since the month's likely big seller, Madden NFL 12, isn't hitting until August 30. This could take sales for the month down "in excess of 30%."

It's not all doom-and-gloom, however. Part of the expected drop is attributed to an estimated 71% decline in PC software, since July of 2010 saw the release of StarCraft 2. Since summer is usually a lower-selling period, pitting a year-over-year comparison against a marquee title like that is bound to create a disparity. Madden is expected to put its strength into improving September, paving the way for slight growth in the fourth quarter.

One possible wild card factor not mentioned in the Gamasutra report could be the impending 3DS price drop and new color. Since hardware is more big-ticket item, strong sales for the system may help overall industry sales.

The NPD Group will release its official figures tomorrow.

Editor-In-Chief
Filed Under
From The Chatty
  • reply
    August 10, 2011 2:30 PM

    Steve Watts posted a new article, Analysts warn of substantial decline ahead of July NPD release.

    Analyst firm Cowen & Company is predicting that tomorrow's NPD Group will confirm that July was the worst industry sales month since September 2005.

    • reply
      August 10, 2011 2:38 PM

      industry sales will be made up over the next couple of months. my poor wallet. :(

    • reply
      August 10, 2011 3:12 PM

      video game bubble is bursting.

      • reply
        August 10, 2011 4:45 PM

        ...and out of that bubble will fall Rage, Skyrim, Space Marine, Deux Ex HR, BF3, Dead Island and Serious Sam 3.

        More pinata than bubble.

        • reply
          August 10, 2011 7:13 PM

          Damn you high expectations! Damn you!

        • reply
          August 11, 2011 5:22 AM

          That's a symptom of a bubble. Publishers can't make money unless they release a mega-hit. It's an unsustainable business practice.

          Of those, I think only BF3 and Rage are going to be super-hits anyways. The other games will sell well, but they won't be blockbusters like the publishers need/expect.

          • reply
            August 11, 2011 5:30 AM

            Rage is going to be a super-hit?

            I'm more inclined to think HR will be a bigger game than Rage.

    • reply
      August 10, 2011 7:52 PM

      Basically if you don't release new games, people won't buy new games. That sounds pretty logical to me, damn these are some good analyst:)

    • reply
      August 11, 2011 2:52 AM

      I always think of RPGs when I hear the word decline.

Hello, Meet Lola