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TechVideo Games

Video Game System Sales Tank in February

By
Chris Morris
Chris Morris
Former Contributing Writer
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By
Chris Morris
Chris Morris
Former Contributing Writer
Down Arrow Button Icon
March 10, 2016, 7:05 PM ET
Sony Corp. PlayStation 4 As Game Console Goes On Sale In U.S.
A logo sits on the front of a Sony PlayStation 4 (PS4) games console, manufactured by Sony Corp., in this arranged photograph taken in London, U.K., on Friday, Nov. 15, 2013.Photograph by Bloomberg via Getty Images
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The two-year rush to buy new video game systems from Sony and Microsoft is slowing down.

Game console sales in February fell 23% year over year in February to $292.2 million, the third consecutive month of sales declines in the category.

The downswing started during the critical December holiday shopping season, during which hardware sales slipped 6% compared to the 2014 numbers. January was similarly disappointing with a 15% slide.

While the numbers are worthy of note, they’re not entirely unexpected. Most hardcore gamers have already upgraded their game systems, meaning console manufacturers are more reliant on mainstream shoppers for the bulk of current sales. And a lack of really big game releases usually slows demand for systems.

Still, Michael Pachter of Wedbush Securities notes that hardware sales have been down year-over-year for five of the past six months, which could indicate weakness in the category.

Adding to the woes are tapering sales of the Xbox 360 and PlayStation 3, which represent the seventh generation of game hardware systems. (The first generation kicked off in 1972 with the Magnavox Odyssey.) Sales of the more recent Xbox One and PS4 are failing to make up the difference as those systems lose their appeal with consumers.

“Both seventh and eighth generation consoles experienced declines,” said Liam Callahan, an analyst with The NPD Group. “Seventh generation console hardware sales dropped by 77%, while eighth generation hardware declined a more modest 6%.”

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Software sales in February were lower as well, but by a more manageable 10%. Most analysts expected that, as February 2015 had a number of big titles, including Nintendo’s The Legend of Zelda: Majora’s Mask 3D and Take-Two’s Evolve.

The month’s top seller was Ubisoft’s Far Cry Primal, a welcome bit of news for the publisher as it continues to seek investors to fight off Vivendi’s attempt to take over partial (or perhaps complete) control of the company.

Vivendi currently owns a nearly 15% stake in Ubisoft—significantly more than CEO Yves Guillemot and his family, whose ownership stake is roughly 9%. They control 16% of the voting rights.

The game outsold its predecessor in the same time period, said NPD. And earlier this week, Ubisoft said its most recent game, The Division, sold more copies in its first 24 hours of availability than any previous title in the company’s history.

Figures for that game will be factored into the March numbers, which will be released on April 14.

About the Author
By Chris MorrisFormer Contributing Writer

Chris Morris is a former contributing writer at Fortune, covering everything from general business news to the video game and theme park industries.

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