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You can chalk up April as a poor month in game sales (sort of).  Matching up to prior predictions, NPD reports the US video game industry returned a second month of double digit sales decline in year over year comparisons.  Revenues fell off 17% year over year.  The year over year growth rates don’t quite tell the whole story, however.

As was partly the case in March too, without the breakout success of hits issued during the same period last year (Mario Kart and Grand Theft Auto IV), the growth numbers were doomed to be weaker. 

Explains NPD’s Anita Frazier, “while April sales might appear soft on the surface, it’s important to remember that April is being compared against a month (2008) that realized nearly 50% growth over April 2007.  This year’s performance still represents the second best performance for the industry in the month of April.”   This year beat out the previously second best April, April 2007, by 26% percent.

Setting aside the year over year growth rate, overall, the month’s performance was reasonably sound.   NPD tabulated total sales of $1.03b.

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Year over year comparisons in the entertainment industry aren’t always the best indicators of performance.  From one year to the next, there can be great variation in the slate of titles, their quality, or their release dates.  A hit one year can make an otherwise good performance the next seem weak.  A schedule change on a key release can make or break a quarter.  Even so, new March sales results released by NPD seem to show the U.S. video game industry’s growth hit a pothole.

Overall for the month of March, he industry was down 17% to total sales of $1.43B.  

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Leading up to another month of retail statistics reflecting the health of the gaming industry, analysts were mixed on their forecasts. Some thought the video game sector would slip slightly in February while others predicted steady, but modest, growth. With data in, the bulls won the pool.

Based on NPD data released today, February video game sales showed sequential and year over year growth.  For the month, the total tally climbed from $1.33b in January to $1.47b in sales.  Year over year it was a ten percent gain.

All of the subcategories tracked in the sector saw comparable growth with percentage returns straddling the double digit mark.  The accessories category showed the highest percentage growth with a gain of 13% over 2008.  Software was the weakest category with a 9% improvement.

Breaking out results by category:
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The teeth associated with Discovery Communications (“Discovery”) are usually those flashed on Animal Planet, during the company’s “Shark Week” TV programming on the Discovery Channel, or when host Bear Grylls eats something disgusting, but it turns out the company’s legal department has plenty of bite of its own.

Today, Discovery filed a suit against Amazon in Delaware US District Court claiming Amazon’s popular Kindle e-book platform willfully infringes on a patent granted Discovery on Nov. 20th, 2007.

Discovery is seeking damages, repayment of legal fees, and in lieu of an injunction blocking Kindle sales, an ongoing royalty.  Discovery has also requested “treble damages,” the legal term for punitive damages up to triple the compensatory finding if Amazon is found in the wrong.

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If you follow the earnings announcements from gaming companies, it might be easy to conclude the industry is taking its share of licks from the recession just as other sectors are.  There’s a bankruptcy here.  Plenty of guidance revised downward.  Missed numbers there.  It’s an easy conclusion to make but it wouldn’t be quite right. Register receipts at retail tell a different story.

Demonstrating a clear gap between the operational performances at individual companies and an industry’s broader health, NPD retail data for January released this week showed the gaming sector grew steadily.  All segments – software, hardware, accessories – reached double digit year over year revenue growth.  As with December results, it was slow and steady, reliant on a few key constituents more than others (namely Nintendo), but still solid.

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The U.S. video game industry chalked up almost$22b in retail sales last year and is continuing to grow steadily.   In 2008,   approximately 20.7m current generation consoles were sold (NPD data).  That number may be relatively small compared to the install base for DVD players (estimated at about 87% of TV owning households in 2007 according to Nielsen), but life to date US sales of consoles as of December were above 81.6m  units (including the PS2, 38.4m, without).  No matter how you count it, that is a substantial market and a sizable number of households. 

Blockbuster in its continuing struggles to reinvent and improve its business wants to reach the gaming market more efficiently than they currently do.  To achieve that, the company announced Wednesday they’ll begin including games in their “Total Access” mail-order rental service.

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The game industry as a sector has been riding out the recession with reasonable success but the performance of individual companies within the industry has been less consistent.  Some companies are faring well while others are announcing subpar sales.  Electronic Arts announced its Q3 Fiscal 2009 results today and fell in to the category of the latter.  EA’s performance was dismal.

Based on GAAP standards, the net loss reported for the quarter was $641m, or $2.00 a share, in the red.  That compares to a loss of $33m, or 10 cents a share, for the same period a year ago. Sales, including deferred revenue, would have totaled $1.74b.

Excluding the onetime charges, EA said they would have earned $179m , or 56 cents a share.  Analysts had projected 88 cents on revenue of $1.9b; both targets EA failed to hit.

The news wasn’t entirely a surprise.  EA reset expectations in early December after Thanksgiving period sales turned out worse than expected.  Even so, the shortfall was worse than many anticipated.

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