Video game sales drop 23% in May

WASHINGTON (AFP) -

US videogame sales declined by 23 percent in May from a year ago, falling below one billion dollars for the first time since August 2007, market research firm NPD Group reported on Thursday.

NPD said sales of videogame hardware, software and accessories dropped to 863.3 million dollars in May from 1.12 billion dollars in May of last year.

Hardware sales fell 30 percent to 302.5 million dollars while software sales fell 17 percent to 448.9 million dollars. Sales of accessories were 25 percent lower at 112 million dollars.

"The video games industry continues to struggle with difficult comparisons to last year," NPD Group analyst Anita Frazier said, although she added that "May is typically one of the lowest revenue-generating months."

"Every category declined versus a year ago with the exception of portable hardware sales which was bolstered by the continued strong sales of the Nintendo DS including both the DSi and the Lite," she said.

Nintendo's Wii remained the top-selling game platform in May on sales of 289,500 units followed by Microsoft's Xbox 360 on sales of 175,000 units, Sony's PlayStation 3 on sales of 131,000 units and Sony's PlayStation 2 on sales of 117,000 units.

Nintendo's DS was the top-selling handheld on sales of 633,500 units. Sony's PSP sold 100,400 units.

"There is a lot of new DS content coming to market this month for a wide variety of gamers, so we should see strong hardware sales continue," Frazier said.

Among game titles, the top-seller in May was UFC 2009 Undisputed on sales of 679,600 units for the Xbox 360 and 334,400 units for the PS3.

Wii Fit With Balance Board was next on sales of 352,800 units followed by EA Sports Active Bundle for the Wii on sales of 345,800 units.

Sony Joins Universal, YouTube Video Site

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Videogame industry prays for resilient 2009

LOS ANGELES (Reuters) – Game publishers, in a rare moment of solidarity, joined forces on Wednesday to convey optimism for the future of their $30 billion industry despite spiraling consumer spending and a global economic downturn.

Electronic Arts, Activision and THQ Inc -- with Activision the sole profit-maker in its last reported quarter -- hope to focus on developing mainly blockbuster titles while finding ways to eliminate costs.

A year-long recession has slowed sales growth. Research house NPD estimates spending on U.S. videogames dived 17 percent in April. With top titles often costing as much to produce as a Hollywood film, publishers have had to make tough choices.

After a wave of belt-tightening in the past year, including widespread job cuts, studio closings and title cancellations, many now adopt a strategy of diverting resources to only their most bankable franchises.

"Our actual net development budget has been significantly reduced this year to $120 million ... but its focus is on a few of these quality titles," THQ CEO Brian Farrell told Reuters.

Executives see glimmers of hope in new audiences and more casual users, expanding beyond the industry's traditionally heavily male demographic to women and older people.

Electronic Arts CEO John Riccitiello sees 1 billion game players from just a few hundred million now.

Crucial to that vast expansion will be games that appeal not just to the hard-core, but also to families andcasual gamers, as exemplified by the enormous take-up of Nintendo's Wii and its best-selling Wii Fit fitness title.

GameStop same store sales stumble

NEW YORK (Reuters) – GameStop Corp (GME.N) said on Thursday its same-store sales dropped more than expected in the last quarter and it lowered its full-year same-store sales forecast.

Shares in the video game retailer fell by as much as 17 percent in midday trading after forecasting another weak quarter of same-store sales, a measure of stores open at least a year.

"The real damage here is in the guidance," said Mike Hickey analyst at Janco Partners.

Fiscal first quarter net income was $70.4 million, or 42 cents a share, up from $62.1 million, or 37 cents a share, a year earlier.

Sales rose 9.2 percent to $1.98 billion, the Grapevine, Texas-based company said.

Analysts had been expecting a profit of 42 cents a share, on revenue of $1.99 billion, according to Reuters Estimates

But comparable store sales - sales at stores open at least a year - missed its own forecast, declining 1.5 percent, due to the recession in Europe and a slowdown of new console sales that occurred late in the quarter.

GameStop reiterated last month that first quarter same-store sales would come in flat to up 2 percent.

"The stock is down because of the surprise decline after they reiterated their guidance with two weeks of the quarter left," said Hickey.

The company said it expects to earn between 28 cents to 33 cents a share in the its fiscal second quarter.Wall Street had been expecting profit to come in around 40 cents.

GameStop also expects same store sales to decline by 8 percent to 11 percent in its second quarter. Janco Partners had been expecting a decline of 4 percent.

Though the company reiterated its full year diluted earnings range of $2.83 to $2.93, it lowered its full-year same store sales forecast to range from flat to up 2 percent down from a previous forecast of 4 percent to 6 percent.

"The real kicker here is Q2 being so weak from a guidance perspective and that's due to slowing hardware sales which have a disproportionate negative impact on same store sales numbers," said Hickey.

GameStop has previously been able to maintain growth despite the economic downturn, as sales of video game consoles by Nintendo (7974.OS), Sony Corp (6758.T) and Microsoft (MSFT.O) remained robust, driving consumers into GameStop stores games to buy software for their systems.

Analysts said the recession has meant consumers are buying fewer games consoles such as Sony's PlayStation 3 until there are significant price cuts.

The company's profit margins have benefited from an active trade-in system, where shoppers return used games for a fraction of the purchase price or credit toward future sales. The returned games are sold at a higher profit margin than new games.

Shares in GameStop were down $3.69 to $22.78 on the New York Stock Exchange.

Intel adopts an identity in software

ntel has worked hard and spent a lot of money over the years to shape its image: it is the company that celebrates its quest to make computer chips ever smaller, faster, and cheaper with a quick five-note jingle at the end of its commercials.

But as Intel tries to expand beyond the personal-computer chip business, it is changing in subtle ways. For the first time, its long unheralded software developers, more than 3,000 of them, have stolen some of the spotlight from its hardware engineers. These programmers find themselves at the center of Intel's forays into areas like mobile phones and video games.

The most attention-grabbing element of Intel's software push is a version of the open-source Linux operating system called Moblin. It represents a direct assault on the Windows franchise of Microsoft, Intel's longtime partner.

"This is a very determined, risky effort on Intel's part," said Mark Shuttleworth, the chief executive of Canonical, which makes another version of Linux called Ubuntu.

The Moblin software resembles Windows or Apple's Mac OS X to a degree, handling the basic functions of running a computer. But it has a few twists that Intel says make it better suited for small mobile devices.

For example, Moblin fires up and reaches the Internet in about seven seconds, then displays a novel type of start-up screen. People will find their appointments listed on one side of the screen, along with their favorite programs. But the bulk of the screen is taken up by cartoonish icons that show things like social-networking updates from friends, photos, and recently used documents.

With animated icons and other quirky bits and pieces, Moblin looks like a fresh take on the operating system. Some companies hope it will give Microsoft a strong challenge in the market for the small, cheap laptops commonly known as Netbooks. A polished second version of the software, which is in trials, should start appearing on a variety of Netbooks this summer.

Google To Reshoot Japan Streets

TOKYO (AFP) -

US Internet giant Google has decided to reshoot Street View photos in Japan following complaints from people who said public images of their homes violated their privacy.

The company's Japanese unit announced the decision Wednesday, saying it would take new photographs with the cameras set lower so the images accessible via net-based maps would not show photos looking into people's houses.

The company has also blurred vehicle license plates in the service.

Google said on its Japanese website that the company wished to provide the new service in a way that is socially acceptable in Japan.

Launched two years ago in the United States, Street View gives Google users a 360-degree view of streets. The service in Japan is now available to show images from major cities.

The move in Japan came after various municipalities and citizens groups accused the company of violating people's privacy by publishing the photos of private houses and community streets without owners' consent.

Japan is not unique in worrying about the Internet feature.

Earlier this week, Greece's data protection agency barred Google from taking any more images for its Street View feature until the company explains the service and its privacy safeguards.

An American court earlier this year rejecteProxy-Connection: keep-alive
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a privacy suit by a couple whose house was shown on Street View.

Microsoft taking on Wii with motion-sensing camera

Nintendo won't be the only video game console maker with a sophisticated motion-sensitive controller if a report out Tuesday from The Wall Street Journal is accurate.

The report said Microsoft plans to unveil a new video camera that would allow players of its Xbox 360 console to control games by moving their bodies. And if true, it's a clear shot across the bow of Nintendo and its innovative Wiiconsole, which shocked the video game world when it was released in late 2006 with its own motion-sensitive controller.

The camera may well be the product of Microsoft's reported acquisition of Israeli start-up, 3DV, which had developed a motion-sensitive camera.

For months, there had been speculation that Microsoft's interest in 3DV was about taking on Nintendo and the Wii. But neither company would confirm such speculation. On Tuesday, Microsoft declined to comment on the Journal story.

The Journal said, "the camera is based on technology that Microsoft developed inside its sprawling research arm," though it added that, "Microsoft also recently acquired...3DV...which has developed a 3D camera and holds related patents."