September 14, 2010 7:07 pm

Microsoft and Sony products set to lift industry

Microsoft and Sony are this week launching products analysts hope will reinvigorate a video games industry stuck in the doldrums.

Halo: Reach, made by Bungie Studios for the Microsoft Xbox, went on sale on Tuesday and, in a direct challenge to Nintendo’s Wii, Sony’s Move motion controller is launched on Wednesday in Europe and in the US on Sunday.

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Sony’s Move will be followed by Microsoft’s Kinect, available in November.

In August, the US video game industry recorded its worst sales in four years, down 10 per cent on August 2009 at $819m.

Sales for 2010 so far are 8 per cent below the same period for 2009, which was a poor year with sales 14 per cent lower than in 2008.

“The August sales results were, in a word, shocking,” said analysts at Wedbush Morgan Securities in a research note.

They blamed a weak economy, the relatively high prices of consoles and the popularity of multiplayer online gaming on services such as Xbox Live “which is giving consumers a reason to hold off purchases of all but the most compelling content”.

The Halo franchise, which sees space-age marines take on alien forces, has generated revenues of nearly $2bn to date.

Halo 3, released three years ago, sold more than 8m copies and earned more than $300m in its first week.

Halo: Reach, a prequel to the saga, is expected to exceed its predecessor’s sales with the installed base of Xbox 360 consoles now three times larger than when Halo 3 was launched.

Its online multiplayer element could also boost subscriptions to Microsoft’s Xbox Live Gold service, which is allowing free access for a limited time. Special Halo: Reach edition controllers and consoles could also help hardware sales.

“If hardware sales react in a similar fashion to what was experienced when Halo 3 was launched in September 2007, September could be a huge sales month for Xbox 360 hardware,” said Anita Frazier, an analyst at NPD.

However, Halo is no longer the biggest “first-person shooter” blockbuster, with Activision Blizzard’s Call of Duty franchise taking over.

With Halo exclusive to the Xbox 360, Call of Duty: Black Ops is expected to exceed its sales when it is launched across all the consoles in November.

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