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2.7%  Q1 GDP    4.57%  avg. 30-year mortgage     9.5%  Unemployment

Nintendo Wii Sales Drop for First Time, 'Video Game Index' Plunges

Japanese game-maker Nintendo said today that sales of its popular Wii motion-sensing game console -- which has outsold Sony's PlayStation and Microsoft's Xbox -- fell for the first time in its three-year history. Sony also reported today that sales of its PlayStation 3 console hit a two-year low.

This news comes two weeks after industry monitor NPD Group reported that June video game sales dropped more than expected, their fourth straight month of decline.

Taken together, these data suggest a sort of Video Game Index: one more way to gauge the health of this economy, now in its 19th month of recession.

Video games and game consoles are the very example of discretionary spending: They're expensive, they're a luxury, they should be among the first things to go in a recession.

Yet they had not been, at least up until a few months ago. Gamers were still willing to put money into their hobby, by buying new games. What's happening now is potential gamers are holding off buying the expensive consoles and current gamers are refusing to upgrade. Both are signs of a truly bad economy.

The official U.S. unemployment rate stands at 9.5 percent and rising (the Labor Department's own figures suggest a truer figure is closer to 16.5 percent). Even though the recession might technically end later this year, it will not be followed by a roaring recovery, most economists believe.

So it makes sense that finally -- finally -- people are deciding to hold onto that $250 instead of handing it over for a new Wii console. (Plus more for the games.)

Indeed, the U.S. personal saving rate -- how much of their money people don't spend -- hit a nine-year high in the first quarter of this year, according to the Bureau of Economic Analysis.

Interestingly, this Nielsen report from earlier this month indicates that gamers who already own consoles and games are playing them more than ever during this recession. We're guessing this is a statistic strongly linked to high unemployment.

In quarterly earnings reports out today, Nintendo said sales of its Wii game box were down 57 percent compared with the same quarter of 2009, sinking profits by 61 percent.

The Sony business unit that makes the PlayStation game machines posted a $418 million operating loss in the quarter ended June 30, compared with profit of $48 million in the same quarter last year.

Last week, Microsoft reported the lowest quarterly sales of its Xbox in two years.

-- Frank Ahrens
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By Frank Ahrens  |  July 30, 2009; 11:49 AM ET
Categories:  The Ticker  | Tags: Microsoft, Nintendo, PlayStation, Sony, Wii, Xbox  
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Next: Will GDP News Turbocharge Market Today?


Citi lost $27 billion in 2008, but handed out bonuses ...It's time to kill. Unemployment figures are going to rise like a body count or something.

Posted by: Dermitt | July 30, 2009 3:30 PM | Report abuse

Hey, I just read something yesterday (maybe a few hours ago) that the economy is, once again, "bottoming out".

I love this sh_t!

Banks handing out bonuses, foreclosure rates dropping, unemployment still climbing. People are so jacked by this propanga machine, they can't find their a$$ with both hands.

The foul machinations of government and its media minions, need to step off and shut the heck up! The day will come when frustrations boil over and the idiots in Washington find an angry mob with pitchforks and torches waiting to do them in.

Posted by: dlkimura | July 30, 2009 8:03 PM | Report abuse

Academics built a coin-flipping machine, so we could build video games in Detroit. Simulators for war games. Big DE dollars in that. Space sims? Keep the laughing gas on.

Posted by: Dermitt | July 31, 2009 2:39 PM | Report abuse

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