Price cuts hit vidgame biz

Games made 6.5% more in sales from last year

The vidgame business sold more product for less in the first quarter of 2003, according to the NPD Group, with last fall’s price cuts on consoles the biggest reason for the revenue drop.

Overall, NPD said, sales of game-related hardware, software and accessories fell 2.4%, while unit sales jumped 7.4%. NPD, considered the chief source of game sales info, didn’t release actual dollar figures.

The big three console makers –Nintendo, Sony and Microsoft — slashed prices for the GameCube, PlayStation 2 and Xbox by $50 to $100; dollars generated by hardware sales plunged 12.6% in the quarter as a result, but the number of units sold leaped upward 16%.

Games sold for those units generated 6.5% more in sales compared to the same quarter last year, but the number of units sold rose only 1.5%.

Another round of price cuts is expected this year and could be announced as soon as this week’s Electronic Entertainment Expo in Los Angeles. Such cuts would greatly benefit Hollywood studios with mass-market and kid-friendly brands licensed to game makers, because the broadening game audience would gravitate to those titles.

As it is, NPD analysts said 2003 is shaping up as the year of movie-based titles, with Atari’s “Enter the Matrix” debuting this week, followed by major entries such as “Terminator 3: Rise of the Machines,” “The Hulk” and “The Lord of the Rings: The Return of the King,” along with titles based on James Bond, the X-Men and Star Wars.

Thus, even though PC-based game sales dropped during the first quarter by 5%, NPD analysts predicted the rest of the year would be rosy. The PC side of the biz will benefit from several highly anticipated titles due later in the year, including Activision’s “Doom III” and Vivendi Universal Games’ “Half-Life 2.”

Electronic Arts claimed seven of the 10 bestselling PC titles during the quarter, led by “Sim City 4” and “Command & Conquer: Generals.” On the vidgame side, Nintendo’s dynamic franchise duo of “Zelda: The Wind Walker” and the next two installments of “Pokemon” held three of the four top sales spots.

Sony’s cinematically minded shooter “The Getaway,” which has been optioned by Screen Gems for a movie, was No. 2. Last year’s sales champ, “Grand Theft Auto: Vice City,” continued strongly, holding at No. 5.

The winter quarter is traditionally the vidgame sector’s slowest, a situation made worse this year by hit-minded retailers who are allotting most of the space on their shelves to the best-known and biggest titles.

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