Sales of traditional console-based video games were down 17% in May from a year ago, as gamers continue to shift to free-to-play games, mobile offerings and a couple of traditional games had lackluster debuts.
Data on U.S. gaming console/handheld software sales for May came in at $141 million according to data tracked by NPD.
Wedbush's Michael Pachter continues to have Outperform ratings on several game companies, but he noted the industry is changing. The retail sales figure missed his estimate of $150 million.
Some of the decline was driven by tough comparisons. April and May releases last year included "God of War" from Sony Corp. (NYSE: SNE)’s Sony Interactive Entertainment, which set records for sales.
On the other hand, this year’s big release in the month, Bethesda Softworks’ "Rage 2" was “underwhelming,” even though it was among the top sellers, Pachter said.
Downloads And Mobile
Industry-wide changes in how gamers get and play their games are starting to affect sales.
“We believe that there was negative pressure on packaged game demand in May 2019 from the aging current-gen console cycle, ongoing digital mix shift, the popularity of free-to-play titles such as Electronic Arts Inc. (NASDAQ: EA)'s "Apex Legends" and Epic Games’ "Fortnite Battle Royale", mobile momentum and potentially a degree of franchise fatigue as well,” Pachter wrote in a note.
"Mortal Kombat 11" from AT&T Inc. (NYSE: T)’s Warner Brothers led industry sales by a wide margin at 243,000 units and that bested Pachter’s estimate of 200,000. The game was part of the reason May sales were down month to month, however, because it was released in April and boosted sales on its debut.
Take-Two Interactive Software Inc. (NASDAQ: TTWO)’s "Grand Theft Auto V" and "NBA 2K19" also were strong. Take-Two was one of the few companies to see higher retail sales over a year ago, with a 16% increase over May 2018.
Hardware sales were slightly above Pachter’s modest expectations in May, mostly on the strength of sales for The Switch from Nintendo Ltd/Adr (OTC: NTDOY), which led industry unit sales for a sixth consecutive month.
Activision Blizzard, Inc. (NASDAQ: ATVI) had retail sales down 21% year over year.
EA, doing well with its free-to-play "Apex Legends" game, took a big hit in retail sales, which were down 44% compared to a year ago.
Nintendo retail sales were down 19% year-over-year.
'Candy Crush' Boosts Activision Blizzard, But The Market's Not Playing Along
Latest Ratings for SNE
View More Analyst Ratings for SNE
View the Latest Analyst Ratings
See more from Benzinga
- Internet Trends Report: Why Immigration Is Critical To The US Tech Industry
- Analyst: Why E3 2019 Missed The 'Whoa' Factor
© 2019 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.