The video-game industry is ramping up its holiday-season promotional activity and ad spending for popular game titles in hopes that a Q409 consumer spending spree will help defray a year-long sales decline.
These efforts were notable on Black Friday and Cyber Monday, according to the Wall Street Journal, which reported that Best Buy, for example, is selling Electronics Arts' Dragon Age at a $25 discount - for $34.99. Similarly, Wal-mart is offering two free games and a Blu-ray movie disc, a $139 value, to those who purchased the $299 Sony Playstation 3 game console.
Ad spending is also on the rise: Videogame specialty retailer GameStop Corp. said it is doubling its holiday ad budget from a year earlier.
Declining Sales
Despite these promotions, it remains to be seen whether they can turn around a lackluster year for video-game sales. According to NPD, video-game sales, including consoles, fell 19% in October to $1.07 billion from a year ago, while software sales fell 23%.
Sales have been declining since March, with the only exception a slight bump in September. The drop in October is particularly worrisome for the industry as game publishers make nearly half of their annual sales in the last three months of the year.
This year sales for the video-game industry are expected to be at least 3% lower than last year's levels - the industry's first year-over-year decline since 2004.
Blockbuster Hits
Aside from ads and promotions, video-game companies are also pinning their hopes on a handful of blockbuster titles just hitting the market. Activision Blizzard reports that its 'Call of Duty' franchise has surpassed $3 billion in retail sales worldwide, citing NPD, Charttrack, GfK and internal Activision estimates. The latest title in the franchise, 'Infinity Ward's Call of Duty: Modern Warfare 2,' recently broke box office and video-game records with worldwide estimated five-day sales of approximately $550 million - the biggest entertainment launch in history.
The industry is hoping for a similarly successful launch of Band Hero, featuring Taylor Swift, DJ Hero and Super Mario Bros. Wii, reports USA Today.
