July Video Game Sales Down 8% Y/Y (ATVI, ERTS, THQI, TTWO)

Video game sales are still depressed in North America. July sales were down 8% Y/Y. The top-selling titles were NCAA Football 11, Lego Harry Potter, Red Dead Redemption and Crackdown 2. Sales numbers and YTD market share for the major players: Activision ATVI $49.7M 10.9% Electronic Arts ERTS $84.7M 16.8% THQ THQI $16.9M 4.7% Take-Two Interactive TTWO $29.4M 9.6% Sony $14.0M 7.0% Microsoft $17.7M 1.7% Nintendo $63.3M 19.7% Piper Jaffray analysts said, "U.S. video game sales decreased -7.9% Y/Y during July-10 to $403M - essentially in-line with our expectation (-10% PJe). Hardware sales increased 12% and accessories declined 2% during the month - both good numbers in our view. Category weakness continues to stem from under-performing new releases, weak catalog performance and soft hardware sales due to aging platforms and high price points. We expect August game sales will remain weak, but will see improvement during Sept.-Nov." Piper Jaffray gives the video game sector a Neutral rating. The analysts do not see catalysts for growth in the next few years as the current cycle reaches maturity.