As the E3 video game industry media show comes to a close today, the game industry got some very good news. In spite of the recession, video game sales are still roaring.
June sales of video game hardware, software and accessories grew 53 percent to $1.69 billion, according to market researcher NPD Group. Hardware sales grew 54 percent, software grew 61 percent, and accessories were up 25 percent.
Nintendo came up on top. No surprise there, as the company sold 666,700 units of its Wii game console and 783,000 units of its DS handheld gamer layer. But Sony managed to outsell Microsoft by a wide margin, thanks in part to the debut of the marquee PlayStation 3 game, “Metal Gear Solid 4.” (Pictured above). The stealth fighting game from Konami sold more than 774,000 copies, making it the top game of the month. Worldwide, Sony said MGS4 sold more than 2.4 million units.
MGS4, which I have been playing and am thoroughly enjoying, has stunning graphics quality and a story that unfolds with long, movie-like scenes. It’s the kind of game that shows off the processing power of the PlayStation 3 and it has been bundled with the PS 3’s more expensive $499 version since its debut. But Nintendo is still cleaning up with the larger market, thanks to more accessible games that appeal to non-gamers, such as its recently introduced “Wii Fit” exercise game, which was fourth on the list of June’s best-selling games. Nintendo’s Wii, which sells for just $249, is also enticing players who are intrigued with its unique, motion-sensitive game controller, which players use by waving it around like a wand. Nintendo had six of the top ten games during June.
Sony sold 405,500 PlayStation 3 consoles, up 311 percent from a year earlier. Microsoft, by contrast, sold only 219,800 Xbox 360 consoles in June. Sony sold 337,400 PlayStation Portable handhelds and 188,800 PlayStation 2 consoles.
But the big news is that the recession has had no effect on gamers and that all three companies continue to prosper from strong demand. Consumers are staying in their homes and deciding that games offer a good value for their entertainment dollar, said Anita Fraizer, an analyst at NPD. According to the Entertainment Software Association, which sponsors the E3 show, about 38 percent of households now have game consoles and roughly 65 percent of homes play either console games or PC games.
Even if growth stalls later this year, Frazier predicted sales would top $22 billion, compared to $18.8 billion in 2007. With 10.9 million units sold in the U.S., the Wii has now overtaken the Xbox 360 as the top selling game console.
LOS ANGELES — I just came back from the “Rock Band 2″ party at the E3 video game show. Inside the Orpheum theater, The Who belted out 40-year-old songs to the delight of the crowd of game executives and journalists. The event was the most exciting so far in a dull conference that has proved, in most respects, to be a shadow of its former glory.
As lead singer Roger Daltrey exhorted the crowd to belt out words “It’s only teen age wasteland!” from “Baba O’Riley,” it occurred to me, like words flashing across a giant karaoke screen in front of my face, that music has made video games bigger than ever.
It’s an obvious trend, arguably one of the most significant forces driving video games into mainstream culture. It started a few years ago with “Guitar Hero” and is now a juggernaut force that is taking hold throughout the industry. The momentum behind this trend is growing, and continues to contribute to a broadening interest in video games. The Entertainment Software Association reports that 65 percent of American households now play video games, and of last year’s top 15 games, five were music games.
Sure, there are pulse-pounding shooting games like “Gears of War 2″ and “Resistance 2″ at E3. But it’s easier than ever to say that music has stolen the show. The halls of the Los Angeles convention center are ringing with music games from every major publisher. The Rock Band 2 game coming this fall is the joint product of Harmonix, MTV Games, and Electronic Arts. It will go up against Activision-Blizzard’s “Guitar Hero World Tour.” Both games involve players using faux instruments which make it easy for just about anyone to play a guitar or the drums in an effort to match the chords and beats of familiar songs, like those from The Who.
While Napster and the iPod have crushed CD sales, which were long ago surpassed by video game sales, the enjoyment of live or recorded music has never been more popular, as evidenced by shows such as “American Idol” and the record concert sell-outs of Disney artists Hannah Montana and The Jonas Brothers. With music-pirating rampant, the music industry has looked to license its music to game companies, who have a proven model for making old songs popular and introducing new artists in the games. Pete Townshend, the guitarist and singer for The Who, joked during the concert, “It’s all about merchandising, isn’t it? That’s why we’re here.”
In turn, music is a universal language and thus it’s an important way for game companies to get their games in front of kids, women, and non-gamers. Moreover, it allows game companies to charge more for their product. The original Guitar Hero, for instance, debuted in 2005 on the PlayStation 2 with a plastic guitar and it sold for $99, compared to the typical $50 price for games at the time. Last year the third version debuted and this year it even made it to the handheld Nintendo DS. Rock Band came with a guitar, microphone and drum set. It debuted last year on three different consoles at $169 (plus a modified version for the PS 2 at $99). You can download your favorite songs to play in the game; EA said more than 15 million songs have been downloaded. The game was so successful that Konami, a pioneer of music games, sued its creators for infringing on its musical controller-related patents.
The popularity of music games has propelled the industry forward in the midst of a recession. Sales are growing rapidly this year. Last year, U.S. game software sales were $9.5 billion; compare that to just $2.6 billion in 1996. And while violent games expose generation gaps between kids and parents, music games are getting every member of the family on the couch together. That fact was acknowledged by Rick Perry, the governor of Texas, who gave a keynote speech at E3.
At E3, the latest trend in music games materialized Monday morning as Microsoft joined the fray with a karaoke game dubbed “Lips,” where you sing into a motion-sensitive microphone. The singer Duffy (who the heck is she?) came to belt out one of her tunes in the game.
Then Microsoft dropped a big bomb on its rival Sony. It announced that Rock Band 2 would be an exclusive for the Xbox 360. Exclusives are a big deal for console makers, and the original Rock Band has sold millions of units worldwide. Shu Yoshida, head of worldwide game development at Sony, told me in an interview, “Rock Band hurt.” But he said the popularity of music games has driven Sony’s own SingStar series of music sing-along games. The trend is everywhere. Disney has been making games for the past few years based on licenses from its properties like “High School Musical.” The games haven’t been particularly good, but they have sold millions to gamers such as young girls. Sega, meanwhile, will make a game based on its “Samba de Amigo” music franchise for the Wii.
Activision-Blizzard spent 25 minutes of its Tuesday night press conference talking about Guitar Hero World Tour, which will allow players to record their own original music and share it with others. It is adding features to the game to make it a true simulation of performance music; at one point, the developer said that the synthesizer could make something like 85 unique sounds.
But Nintendo, whose Wii console is the most popular, might have had the best idea of the show. Taking note of the growing complexity of the “battle of the band” games, Nintendo has been developing Wii Music for several years in an attempt to make a completely accessible music game.
Cammie Dunaway, head of Nintendo’s U.S. sales and marketing, said that simplicity is the driving force behind the game, which is being spearheaded by Nintendo’s chief game designer, Shigeru Miyamoto. I tried it out. You basically can hold the Wii controller and wave it around in the air as if you were playing an instrument. I used it to play a violin and a set of steel drums. It really gives new meaning to the phrase “air guitar,” as the movements are wirelessly broadcast to the Wii and then transferred into the animated graphics on the screen. The music includes easy titles like “Twinkle, Twinkle, Little Star,” and there is no way for gamers to “fail out” of a song by hitting the wrong notes. I have never played a musical instrument seriously in my life. I enjoyed Rock Band and Guitar Hero, as did my kids. But we dropped those games fairly early, after the novelty wore off, because we just kept failing to get the chords right.
Nintendo has made a game that is much easier for the non-musician to enjoy. There is very little built-in competition in the Nintendo product and it is really more a tool for free-form play. It’s likely to appeal to young gamers, but Dunaway notes that Nintendo has done the best job at expanding gaming to new audiences. There are two distinct strategies. Rock Band and Guitar Hero are in a kind of arms race to add new songs and new features. Nintendo, which will debut Wii Music with a mere 50 songs, could very well make musicians out of the rest of us. And that could be one of the gaming industry’s biggest victories as it seeks to become an ubiquitous form of entertainment.
“Nintendo’s execution on this is amazing,” said Joseph Olin, president of the game developer group, the Academy of Interactive Arts and Sciences. “It is just what the market needs at this point to drive us toward new users who would never otherwise pick up a controller.”
As the E3 video game industry media show comes to a close today, the game industry got some very good news. In spite of the recession, video game sales are still roaring.
