At Last, A Ray Of Sunshine For Video Game Sales

The recession nearly ruined the video game business, pushing some publishers such as Take-Two Interactive (NASDAQ: TTWO) to the financial brink. Even Electronic Arts (NASDAQ:ERTS) reported huge losses and laid off more than 10% of its staff.

It now appears that the industry has began to emerge from nearly two years of damaging losses and falling sales.

According to market researcher NPD,  March video game sales were up 6% to $1.52 billion from the same month a year earlier  Much of the improvement came from higher sales of Nintendo game consoles. Despite the age of the Wii, it remains a best seller and its smaller brother the DS has also sold well.  Wii sold 557,500 Wii units, and DS sales were  700,800. Microsoft Corp.’s (NASDAQ: MSFT) Xbox 360 sold 338,400 units and Sony’s (NYSE: SNE) PlayStation 3 sold 313,900. Despite sharp price cuts, the Xbox 360 and PS3 cannot catch up to the Wii, perhaps because it targets casual gamers.

Among games,  “Battlefield: Bad Company 2” from EA sold well as did “Final Fantasy XIII” from Square Enix. There are enough games being launched by the big publishers including EA and Activision Blizzard Inc. that there is some reasonable chance that the industry could do  better this year than last for several months.

Popular games will only prop up the industry for so long. The recession seems to be over, and the worst days of the video industry probably are as well.

Douglas A. McIntyre