US Software sales down 10 per cent in May

The NPD Group has released the latest US software sales data for May, revealing a 10 per cent decline compared to last year as next-gen titles fail to offset the impact of the current hardware transition.

According to the data provided by NPD, current generation software sales were down USD 96 million, primarily attributed to a continued lack of Xbox and GBA games. However, the market was boosted by strong sales of Square Enix' Kingdom Hearts II, Take-Two's Major League Baseball 2K6, Activision's Over The Hedge and Nintendo's latest DS release, New Super Mario Bros.

Xbox 360 sales were down from the previous month despite continued strong performances from Bethesda's Elder Scrolls IV: Oblivion and Ubisoft's Ghost Recon: Advanced Warfighter. Next-gen sales totalled USD 98 million - falling way below previous estimates of USD 135 million.

Market analysts Wedbush Morgan Securities commented: "We continue to believe that a slowdown in software sales will persist through the summer months. Going forward, we expect the decline in current generation software sales to be larger than the lift from next generation sales, at least until the Sony PS3 and Nintendo Wii are launched."

US software sales rose in April, boosted by strong sales of titles such as Oblivion, but analysts warned at the time that the lift was likely to be short-lived and that further declines were to be expected as the impact of the hardware transition continues to affect the software market.

WMS is expecting software sales to be down around USD20-30 million for the coming few months, but believes the introduction of the Wii and PS3 consoles during the final quarter will generate a significant boost to the market and more than offset current declines.

"We think that the transition is only partially complete, and believe that several bumps in the road lie ahead," WMS commented, adding that software attachment rates for Microsoft's Xbox 360 are likely to decline from the current 3.9 to 3.5 per console sold over the coming months as consumers await both the launch of key software titles and the Wii and PS3.