With a significant downturn in overall sales for the first half of the year, the recession appears to be one very formidable opponent for the videogame biz. Yet the industry’s biggest players are showing signs of resilience despite a cutback in consumer spending.
Several high-profile titles, including “Prototype” and the popular “Guitar Hero” and “Call of Duty” franchises, helped Activision Blizzard, the largest gamemaker, post an impressive $195 million profit during its second quarter ended June 30, on earnings of a little more than $1 billion.
The company, formed through a merger with Vivendi’s Blizzard Entertainment last year, also released the film-related games “X-Men Origins: Wolverine,” “Transformers: Revenge of the Fallen” and “Ice Age: Dawn of the Dinosaurs,” during the three months, which all sold well.
Close rival Electronic Arts saw sales rise 34% to $816 million during the same period from the launch of “The Sims 3” and “EA Sports Active” and new installments of “Tiger Woods PGA Tour” and “Fight Night.” They helped the company narrow fiscal first-quarter losses to $6 million (when taking into account deferred revenue collected from retailers) from $135 million a year earlier.
Those and other games also helped EA become a leading publisher of titles for Nintendo’s Wii console, with a 21% share of all games sold on the device in North America.
Its digital division, which distribs games online, saw a 38% uptick in sales to $124 million, although that still only accounts for 14% of its biz.
Overall, sales for the videogame industry are down 12% in the first half of the year, according to NPD Group.
Yet analysts anticipate sales will improve significantly in the second half, especially during the holidays, when publishers roll out their more notable titles.
Those include Activision’s “Guitar Hero 5,” “Call of Duty: Modern Warfare 2,” “Tony Hawk: Ride,” “DJ Hero,” “Marvel: Ultimate Alliance 2” and “Wolfenstein.” EA has “The Beatles Rock Band” in September, followed by “Mass Effect 2,” “Dragon Age,” “Left 4 Dead 2” and “Brutal Legend.”
Still, the recession is forcing companies to push some high-profile titles into next year:
n Activision moved actioner “Singularity” into early 2010.
n Blizzard shifted fantasy title “StarCraft II” into the first half of the year to coincide with a new online gaming service for the property.
- Take-Two Interactive, behind the “Grand Theft Auto” franchise, moved “BioShock 2” into early next year to give developers more time to finish the game.
Those new dates reduce the amount of competition titles will face during a crowded holiday but will also affect earnings for their publishers throughout the rest of the year.
Activision forecasted it will take a $300 million hit in revenue for 2009 because of a downturn in the biz.
EA also remains wary. “The industry is weaker than originally expected and we remain cautious on macro events,” said EA chief exec John Riccitiello.