Video Game Sales Increase, Investors Not Impressed

Despite many notable game releases this year, the video game industry continues to struggle. After six solid months of disheartening declines, the industry rebounded and experienced a 5% increase in sales during the month of September, according to data provided by NPD Group. While appearing like good news on the face, the upswing is well below the 15% that analysts were calling for and represents further disappointment in an industry that was hit hard all summer. Of particular note was the failure of major music game releases including Guitar Hero 5 and The Beatles: Rock Band to live up to the hype–sales were projected at $220 million for September, but came in at slightly over half that much at $115 million.

Proving that the 5% increase was a disappointment, stock prices fell after reports of the news. Many video game companies experienced declining stock prices including Electronic Arts, which fell by 5% and THQ Inc., which fell 2 %. Retailer GameStop experienced a 7.5% decline.

On a positive note, game console sales were stronger than anticipated during the month of September. Sony PS3 experienced a 134% increase over August sales, while Nintendo Wii enjoyed a 67% month-to-month increase.

While the strong console sales could help to boost software sales in the months to come, total sales for the year are still expected to fall short of last year’s numbers and investors will likely remain cautious until sales strengthen considerably. [via WSJ] [Photo: RebeccaPollard]