April Video Game Sales Up - InformationWeek

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April Video Game Sales Up

Video game sales rose 16 percent in April to $699 million, ending seven consecutive months of year on year declines.

Video game sales rose 16 percent in April to $699 million, ending seven consecutive months of year on year declines, analyst reports say.

The recent PlayStation 2 price cut pushed up PS2 software sales 24 percent after declining for 12 consecutive months, according to a report from Merrill Lynch & Co. The analyst firm said Software sales on Microsoft Xbox dropped 57 percent as gamers opted for the Xbox 360 instead.

Merrill Lynch expects Xbox 360 unit shipments to increase in the next few months, fueled by recent price cuts on the PS2 and PSP, and the launch of the Nintendo DS in early June. Game sales for the Nintendo DS console rose 240 percent, while PSPs declined 15 percent.

The average price for a videogame declined 3 percent for the industry. Activision dropped 41, Electronic Arts rose 8 percent, Take 2 rose 2 percent, and THQ declined 17 percent, according to numbers released by The NPD Group Inc.

Software sales for Electronic Arts rose 45 percent year on year, according to NPD, compared with Merrill Lynch's fiscal first quarter 2006, ending June, revenue publishing estimates of $252 million, down 18 percent year on year. Battlefield topped sales in April. FIFA World Cup was also released in April on eight platforms.

Software sales for Activision declined 44 percent in April compared with the year-ago quarter, according to NPD, compared with Merrill Lynch's fiscal first quarter 2006, ending June, revenue estimates of $113 million, down 41 percent year on year.

Expect Cars to drive THQ sales late in the quarter, according to Merrill Lynch. Software sales for THQ dropped 29 percent in April, according to NPD, compared with the Wall Street analyst firm's revenue estimate of $136 million, down 14 percent year on year. Merrill Lynch believes the June release of the Cars, supported by the highly anticipated Pixar movie, will drive sales late in the quarter.

The numbers also suggest early signs the transition to new game consoles could prove lucrative for the industry. Some research firms worry, however, Sony's decision to price its consoled higher than Microsoft's and Nintendo's based on adding the Blu-ray drive in the PlayStation 3 could jeopardize its market lead when it's released in November.

ABI Research says asking consumers to pay between $500 and $600 for a game console, when most have yet to purchase a high-definition television may give many current PlayStation 2 owners reason to consider the competition.

The research group also believes Nintendo is the best positioned of the three to expand into the casual gamer and new gamer audiences with titles, such as Wii Sports and WarioWare: Smooth Moves.

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