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Microsoft, Sony and Nintendo all stumble – not recession proof after all

By on July 31, 2009

The first quarter results for the three major platform holders make grim reading and explode the myth that console-based gaming is recession-proof.

  • Microsoft annual revenues from the Entertainment and Devices division were down 5% ($8.20 billion year to June 2008, $7.75 billion 2009). The quarter ended June 09 suffered even worse, with a drop of 25%.

“Revenue from our Entertainment and Devices Division decreased across most lines of business including Xbox 360 platform and PC game revenue which declined primarily as a result of decreased console sales and revenue per console due to price reductions during the past 12 months, partially offset by increased Xbox Live revenue.”

Microsoft Earnings Release

  • Sony’s newly created networked products division, which includes Vaio laptops as well as PlayStation, reported a fall in revenues of 37% for quarter ended June 09 and an operating loss of Y39.7bn. Sony blamed weaker game and VAIO PC sales

“Sales in the game business decreased year-on-year as a result of a decrease in unit sales of PSP and PlayStation 3 hardware and an overall decrease in software sales, as well as the impact of the appreciation of the yen.

Sony Earnings Release

  • Nintendo’s revenue fell by over 40% compared with June 08. Nintendo squarely blamed the lack of new, blockbuster software titles for the fall in popularity of its hardware

“Regarding Nintendo DS Software sales in the first quarter, the Pokemon Platinum sold well overseas, however, there were few new popular titles.”

In the console business, there were fewer blockbuster titles that briskly drove hardware sales this June quarter versus the same period a year ago when titles like Mario Kart Wii and Wii Fit were launched in overseas markets.”

Nintendo Earnings Release

Alongside the NPD data showing continued declines in US software sales, these results paint a pretty gloomy picture of the recession proof nature of the console-based games industry.

About Nicholas Lovell

Nicholas is the founder of Gamesbrief, a blog dedicated to the business of games. It aims to be informative, authoritative and above all helpful to developers grappling with business strategy. He is the author of a growing list of books about making money in the games industry and other digital media, including How to Publish a Game and Design Rules for Free-to-Play Games, and Penguin-published title The Curve: