| Set On Stun |

broke people + choosing between games or food does not equal sales

Hang on to your tissue boxes — Microsoft says they lost money last year. You could blame this flurry of diminishing reports on the our current economic woes and you would be partially right but what about the rest of it? Could it possibly be that an overabundance of peripheral and music games, lack of  really earth shattering titles, endless release delays and poor marketing led to this general decline last year? And by the way a billion dollar company not making an extra billion — is that really bad news?

Maybe, maybe not. For Nintendo a big reason in their drop was the decline of the sales of the DS. Wii sales were also down and so collectively you have a situation where they’re not clearing a lot of hardware and frankly how many Mario games or versions of  Wii Sports or Wii Fit can you own?  For Microsoft, last year’s price drop  was a great marketing ploy and definitely sparked more people into buying consoles but let’s face it, when you’re broke $300 isn’t going to go to a new console and the only games you’re playing are the “price savings/coupon clipping/shop around game” at the grocery store.

On the plus side Xbox live boasts a membership of 23 million people which is amazing when you consider you have to pay for that gold membership and Sony’s is free. Of course Sony’s PSN isn’t anywhere near as good as Xbox Live and has a long way to go before that happens but hey, they’ve got blu-ray.

Know what all of this sounds like when you still see figures for these companies in the billions? — blah blah blah, poor us, blah blah blah. That’s right, unless they’re losing money left and right and firing so many people that Detroit looks like the land of opportunity, then all of these reports and analysis on why sales are down are a bunch of bunk.

poor us --we can't sell a jillion consoles

Here’s the bottom line — even with cheaper consoles why would it matter unless there were games you wanted to play? Argue all you want about what a great year it was last year in games but go back and take a good look at the whole year. Outside of the billion dollar boon for Modern Warfare 2, how many games released last year were driving sales?

We’ve reached a point in the industry where we should be seeing a lot more quality titles coming out over the course of the year but outside of a few standouts last year, we didn’t see that many games drives sales.  Videogames are at a level of abundance that we haven’t seen since halfway through the last decade so it’s almost as if there’s no driving force behind the supply and demand. The prices are reasonable enough, you have three consoles to choose from, you can play games on phones, iPods and of course computers so what’s driving people to buy these things? And if you lump on to a lack of  compelling reasons to get you into the store, a poor economy and games that really aren’t winning people over well, you get poor sales. Did they really need a report to figure that out?

Hey console makers, call us when you have something important to report.

going going gone

breaking the door, breaking the door!

So as we enjoy the annual gorgefest that is Thanksgiving weekend there are a good chunk of us out there who will be burning off some of those calories battling the crowds looking for deals. How does that translate in the gaming world?

As we highlighted in a recent  post, the marketing machines have all slowed down to a crawl now that all the big-budget releases have hit the shelves (sorry Tony Hawk: Ride!). So as we with the websites start to spend our collective keyboards looking back at 2009 and picking our games of the year, consumers can look forward to the next few weeks of “crazy” deals that retailers far and wide will be offering in an attempt to move some of this year’s top titles. How crazy? Well, it’s not Dr. Frankenstein trying to reanimate an 8-ft corpse with electricity crazy but it is impressive and somewhat comical to see what stores consider deals and what they’ll do to try and move some of this merchandise. All this in a year when videogames as a whole have dropped in sales and the signs of the recession finally made its way to the seemingly recession proof industry.

Everyone from Target, to Wal-Mart to Toys R Us is serving up their own slice of the gaming pie with deals ranging from markdowns on new releases (a $40 game instead of a $60 deal — $20 bucks is not a crazy deal by any measure but hey it’s still 2o bucks) to the crazy bundle deals. Bundle deals like buy an Xbox Elite and 6 games for $300 — now that’s a deal except you don’t choose the games. The 6 games alone would cost you half the price of the console but the bigger question is, would you buy these six games anyway and will it be enough to get you to spend $300 on a new console rather than just $40 plus tax on a game? Maybe the uninformed present or the gaming nube but us gamers are a little wiser to those kind of deals.

It would seem that both last year and this year, in our current economic situation, the keyword is deal and if it doesn’t really sound like one then too bad retailer. On the plus side you have proof positive from the Modern Warfare 2 sales that people are willing to spend money on a game but does that scenario play out in holiday shopping? On the down side this may be a situation where because consoles and games are such high end items anyway that the gift givers may opt for the gift card which means the recipients may or may not choose to buy game stuff. The classic “I don’t know what he owns” utterance means a gift card is an easy out. But that means all these doorbuster deals are moot.

As to whether this holiday shopping season will salvage the sales slump will be determined in a month or so but for now retailers are certainly doing their part to make it happen.