Video Game Sales Slump: Insert More Coins To Continue

Written by Rebecca Lipman

Gamers, listen up, your hobby is in jeopardy. U.S. retail sales of video game hardware, software and accessories fell 34% in January from a year ago, and profit margins don't like it.

Market researcher NPD Group reports the sales fell to $751 million "due to the lack of new game titles." (via CNCB) Specifically, hardware sales fell 38% to $200 million while accessories were down 8% to $195 million.

The scarcity of new launches and hype "likely resulted in fewer people going to stores and buying other recent releases on impulse," says NPD analyst Liam Callahan.

Even holiday spending was disappointing, down 31% this January compared to a year ago - well below analyst expectations of 12%.

Come on gamers, aren't you finished playing "Call of Duty: Modern Warfare 3" yet? Move on, boost profits.

Interactive Chart: Press Play to compare changes in market cap over the last two years for the stocks mentioned below.



Business Section: Investing Ideas
To see how the poor sales are affecting the industry we list below a few of the major video game stocks and their performance since the New Year.

Do you think the trend will continue or is it likely to rebound? (Click here to access free, interactive tools to analyze these ideas.)

1. Activision Blizzard, Inc. (Nasdaq: ATVI): Activision Blizzard, Inc. publishes online, personal computer (PC), console, handheld, and mobile games of interactive entertainment worldwide. Market cap of $14.10B. Year-to-date the stock has changed by 0.04%.

2. Changyou.com Limited (Nasdaq: CYOU): Develops and operates online games in the People's Republic of China. Market cap of $1.33B. Year-to-date the stock has changed by 10.41%.

3. Electronic Arts Inc. (NYSE: EA): Develops, markets, publishes, and distributes game software and content for video game consoles, personal computers, mobile phones, tablets and electronic readers, hand held game players, and the Internet. Market cap of $5.77B. Year-to-date the stock has changed by -15.44%.

4. Shanda Games Limited (Nasdaq: GAME): Engages in the development and operation of online games in the People's Republic of China. Market cap of $1.08B. Year-to-date the stock has changed by -2.56%.

5. International Game Technology (NYSE: IGT): Designs, manufactures, and markets electronic gaming equipment and systems worldwide. Market cap of $4.62B. Year-to-date the stock has changed by -9.83%.

6. Konami Corp. (NYSE: KNM): Develops, publishes, markets, and distributes video game software products for stationary and portable consoles, as well as for use on personal computers. Market cap of $3.84B. Year-to-date the stock has changed by -10.75%.

7. Microsoft Corporation (Nasdaq: MSFT): Develops, licenses, and supports a range of software products and services for various computing devices worldwide. Market cap of $255.88B. Year-to-date the stock has changed by 17.47%.

8. Take-Two Interactive Software Inc. (Nasdaq: TTWO): Develops, and distributes interactive entertainment software, hardware, and accessories worldwide. Market cap of $1.37B. Year-to-date the stock has changed by 16.61%.

9. Zynga, Inc. (Nasdaq: ZNGA): Develops, markets, and operates online social games on the Internet, social networking sites, and mobile platforms. Market cap of $9.32B. Year-to-date the stock has changed by 41.66%.

Use the Investopedia Stock Simulator to trade the stocks mentioned in this stock analysis, risk free!



Rebecca Lipman does not own any of the companies listed above. Data sourced from Finviz.