NEW YORK ( MainStreet) -- Video game sales got a little push from motion controllers last holiday season, but the video game industry's going to need a software power-up if it wants any presents under the tree this year.
There's already a chill over video game console and accessory sales as holiday shopping begins. Last December, spending on Nintendo's Wii, Microsoft's (MSFT) Xbox 360 and Sony's (SNE) PlayStation 3 consoles decreased 16% from December 2009, according to market research company NPD Group. Accessory sales jumped 10% last year as more casual gamers danced awkwardly in front of Microsoft Kinect motion capture devices and swung orb-topped PlayStation Move motion wands like would-be Gandalfs as each item sought a share of the Wii's jittery, jumpy fan base.
|Slumping consoles such as the PlayStation 3 and so-so software sales need new titles to lifts gamers' holiday spirits.|
Much as the Guitar Hero/ Rock Band frenzy of years before left gamers with closets full of unused peripherals, excitement over the Kinect and Move has lost momentum. Overall video game accessory sales were down 14% in September -- the last month for which NPD Group had figures available -- from September 2009, when the Move was just released and the Kinect was still more than a month away.
The platforms' parent companies have responded with as many cheat codes as possible to help drive demand. Nintendo dropped the price of its Wii by $50, to $149, back in May and packaged it with the popular Mario Kart Wii instead of the well-worn Wii Sports. Not to be one-upped, Sony dropped the price of the PS3 to $249 from $299 back in August and put it just a bit closer to the $199 cost of a base-model Xbox 360."I think Wii will still be No. 1 in December, as it has the lowest price point, and the big box guys tend to offer big gift card promotions with any console," says Michael Pachter, video game expert and managing director of equity research at Wedbush Securities. "A $149 Wii with a $50 gift card from Wal-Mart (WMT) makes it a pretty easy decision." Facing attacks and peril from all sides like its mustachioed plumber figurehead Mario, Nintendo could certainly use the boost. By introducing the next-generation, high-definition Wii U at the Electronic Entertainment Expo this summer, Nintendo effectively made the Wii's current incarnation a lame duck and any revenue from it a bonus at any price. Meanwhile, Nintendo's once-dominant DS handheld gaming devices are on the defensive as increasing pressure from Apple (AAPL) iOS and Google (GOOG) Android portable devices and their cheap-to-free game apps squashed DS market share decreased from 70% in 2009 to 57% last year. As a result, Nintendo's bare-bones DS Lite had its price whittled to $99 back in June just to generate interest. The new Nintendo 3DS, meanwhile, had its price slashed from $250 when it was released in March with little software support to $170 in July with promises of a Star Fox 64 release in September, a Super Mario 3D Land in November, Mario Kart 7 in December and Kid Icarus: Uprising next year.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV