9:51AM EST November 18. 2012 - On the verge of the all-important holiday shopping season, the video game industry may finally be gaining some steam.
Much of the credit is due to Sunday's arrival of the first major new home game system in six years, Nintendo's Wii U, and new entries in two blockbuster game franchises, Call of Duty and Halo.
Late Saturday, shoppers descended on select Best Buy stores around the country that began selling the new Wii UI system at midnight, priced at $300 and $350.
There weren't expected to be many available on store shelves Sunday because retailers such as GameStop had pre-sold their allotment nearly two months ago.
Also selling briskly is Call of Duty: Black Ops II, which topped sales of more than $500 million worldwide on its Nov. 13 release date. That marks the fourth consecutive year that Call of Duty has set new highs, publisher Activision says.
And Halo 4, released Nov. 6, had its own massive launch, posting first-day global sales of more than $220 million. That game is only available for Microsoft's Xbox 360 video game system, while Call of Duty: Black Ops II can be played on multiple game platforms including the Xbox 360, PlayStation 3 and Windows PCs.
Activision and Microsoft have both compared the video game debuts to that of Hollywood's biggest offerings. Activision considers Black Ops II's first-day sales to be the year's biggest entertainment launch and notes that Call of Duty sales have topped global box office totals for Harry Potter and Star Wars films.
Those two new games and October's well-received Assassin's Creed III provide a "November trifecta" of hits going into the holiday season, says analyst Liam Callahan of market tracking firm The NPD Group. And interest in the Wii U will spur visits to stores, he says.
Momentum is important for video game makers and retailers because as much as half of all annual video game hardware and software sales are tallied in the last three months of the year, Callahan says.
Video game retail sales this year have tracked below 2011, which was no boom year, either. Sales of game hardware and software fell about 8% in 2011 from $18.6 billion to $17 billion. Much of the decline has been attributed to the aging of the current crop of game systems â€" the Xbox 360 is seven years old, the Wii and PlayStation 3 are six â€" and fewer big releases.
Even with the momentum, overall video game retail sales will probably fall 2% or 3% below 2011 totals, says Wedbush Securities analyst Michael Pachter. That's because many parents are opting to buy kids smartphones and multifunctional portables rather than dedicated handheld game systems. "My bias is that cheap Kindles are really going to hurt the PlayStation Vita and Nintendo 3DS," he says.
However, retail sales are not the only barometer. On the rise: digital sales of mobile games for phones and tablets, full games for consoles and handhelds, extra levels and other in-game content. Digital sales rose 22% in the third quarter of 2012, accounting for $1.4 billion, according to NPD.
The $2.87 billion combination of digital sales, new retail sales, along with used game sales and game rentals is only 1% below 2011.
And, surprisingly, about one-fourth of shoppers may be in the market for a game system this holiday season. A new survey from research and consulting firm Parks Associates finds that 25% of consumers intend to purchase a video game console, up from 12% in 2011 and 9% in 2010.
It's not just the Wii U driving intent, says Parks Associates analyst Jim O'Neill. Shoppers expect to find holiday deals on the PS3 and Xbox 360, both of which have matured into digital media receivers capable of streaming movies and TV, as well as playing high-definition video games.
"There's just more content coming over that device now. So you kill two birds with one stone, you get a great gaming console and a great way to get over-the-top television," he says.
That intent to buy could also be a hint that consumers foresee economic improvement. "It just seems there's a little more confidence," O'Neill says. "You just see people breathing a sigh of relief that, 'OK, I can have Christmas now.' At least that is what I am hoping."
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