Sales of Microsoft’s (NASDAQ: MSFT)new “Halo: Reach” video game reached $200 million on the first day it was available. The world’s largest software company expects sales of the game to help push the launch of its new Xbox Kinect system which will be available on November 3.
‘The basic version of “Reach” costs $60, with special editions priced at $80 and $250, according to Reuters. The news service also reports that Microsoft has sold 34 million copies of Halo since it was introduced nine years ago.
Video game sales, both consoles and content, have been abysmal for more than a year, primarily due to the recession. The revenue from the category is considered a reasonably good marker for overall demand for consumer electronics, and it is important that games perform well during the holiday season to lift retailer results.
The three major gaming companies–Nintendo, Microsoft, and Sony (NYSE: SNE)– have all cut prices and added features to their products. So far, this has not helped much. Microsoft’s Xbox 360 has done relatively well compared to its rivals over the last few months as it has added features like online playing and the ability to download entertainment content from the web. On the other hand, the Nintendo Wii, which has been the top-selling game system for more than three years, is aging and its sales have begun to taper off.
Microsoft’s “Halo: Reach” success is an example of the fact that content drives console sales and not the other way around. Consoles can be upgraded with new features, but it is new games that draw interest from consumers.
Gaming is not unlike any other forms of entertainment. Hardware can evolve, but, the overused statement is nonetheless true–“content is king.” Microsoft better hope that is true with its newest game software. Otherwise, it will be a long and brutal winter.
Douglas A. McIntyre
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