video game hardware and software sales totaled about $16.8 billion in 2009, down 18 percent from $19.5 billion in 2008.
Industry sales down 18% from last year... GME sales are flat in 09. Think about that. There is way too damn much doom and gloom.
That is not the whole story. Guitar hero world tour did 1.2 million across nov/dec in 2008 and rock band didn't even make the top 10. And there were actually MORE AAA releases this holiday season than last year.
For some weird reason the gaming industry lagged the rest of the economy in getting hit by the recession but they're definitely feeling it now. Wall Street's short-term focus means that's a recipe for disaster. The hardcore gamer is still buying but the casual crowd are definitely staying away from the segment and until that changes I suspect the hurt will continue.
hayden in 2008. Rockband 2 and Guitar hero world tour were both huge... 08 was peak of music games. 200 dollar box with high profit margin that sold in millions, its not hard to see why 08 was so great. Also 08 xmas season had alot more AAA games which sold well but took market share from each other. Hence why alot of AAA games are coming out this first quarter not to compete with each other.
Why would you want to byu a retailer for an industry that is down 18%? There is no chance at all for recovery until the next gen console arrive and they are at least 2 years away.
Yes and by the time 2 years is up, this will have at least doubled if not tripled from where it is today. Now is the time to start building a position for the next cycle. NOT after the console makers announce and then Cramer and all the analysts have written their reports about how the gaming cycle is coming and will be blockbuster. You sell your cost basis to those guys after those events occur. That is how it works.
Game industry is like the movie industry. The ups and downs are dictated by the software titles. Have a few huge titles in a year and you have a banner year. Have no blockbusters or very few and you have a soft year. This is the nature of "entertainment" business.
GME cannot control release of titles. They can only sell what is out there. Compared to 2008 the blockbuster list was very small. Not as many games as people wanted. Also the whole guitar hero / rock band mania is mostly played out. Everyone wants the franchise games or the next big thing. GME is at the mercy of these trends. Fortunately 2010 has many blockbuster franchise releases that were pushed out of 2009 and into 2010 plus the natural 2010 releases that were already scheduled.
Very good point there. Taken in context GME's numbers were respectable. Had GME sucked and lost 15% to 40% last year like every other retailer in Q4 instead of being one of the rare few that was actually UP in 2008 then the 2009 would have looked like a grand slam.
GME is being punished for having a great 2008 while all others suffered and now others have easy comps while GME has to fight the headwind of a spectacular 2008 which was a time while all other retailers were in steep decline