Sony Corp. (6758)’s PlayStation 4 beat Microsoft Corp. (MSFT:US)’s Xbox One in U.S. console sales in May, extending its lead for a fifth straight month.
Overall consumer spending on video-game hardware and software jumped 52 percent to $586 million last month, compared with a year earlier, with the PS4 retaining its sales lead as the No. 1 platform, NPD Group Inc. said in an e-mailed statement yesterday.
Microsoft last week began selling a lower-priced version of its Xbox One to match the $399 price of Sony’s PS4. The company had struggled to convince gamers that the $499 price tag of the console is justified. Both companies showcased new titles for the machines at the industry’s annual E3 conference earlier this month, as they gear up for the year-end holiday season.
Shares of GameStop Corp. (GME:US), the largest seller of consoles and video-game titles in the U.S., rose 6.8 percent to $40.29 at the close in New York. The Grapevine, Texas-based company is depending on the new generation of consoles to boost sales in an industry that’s been hurt as consumers have shifted to playing games on social networks and mobile phones.
“GameStop is well positioned to benefit from a renewed growth period within the console video game industry driven by adoption of the PS4 and Xbox One,” Michael Olson, an analyst at Piper Jaffray Cos., said in a note yesterday. Past declines in industry software sales “are largely cyclically driven and the industry is poised to grow sustainably in late ’14,” said Olson, who has the equivalent of a buy rating on the retailer’s shares.
While most of the rise in console sales last month was driven by the Xbox One and PS4, there was also growth from a year earlier for Nintendo Co. (7974)’s Wii U and Sony’s PS Vita after the addition of game titles, according to NPD.
“Two examples of hardware bundles that helped to drive hardware sales in May 2014 include Mario Kart 8 bundle for the Wii U, and the Borderlands 2 bundle for the PS Vita,” Liam Callahan, an NPD analyst, said in an e-mailed statement.
U.S. hardware sales in May almost doubled to $187 million, while revenue from software excluding titles for PCs gained 57 percent to $274 million. The increase in game sales was the first after six months of declines and helped overall sales jump the most since June 2008, according to NPD.
Seven of the 10 top-selling titles in May play on the new consoles, including the No. 1 game Watch Dogs from Ubisoft SA, the researcher said.
The last three months of the year will see a raft of big-budget titles, including Activision Blizzard Inc. (ATVI:US)’s Call of Duty: Advanced Warfare and Destiny, Electronic Arts Inc.’s Battlefield Hardline and Ubisoft’s Assassin’s Creed Unity and Far Cry 4.
Microsoft’s Xbox One has trailed the PS4 since both consoles were released in November. At the E3 conference in Los Angeles, Microsoft used its entire presentation to focus on hard-core players, who were alienated by an Xbox One debut last year focused on non-game entertainment.
Shares of the Redmond, Washington-based company rose 0.4 percent to $41.68 at the close in New York.
Shares of Sony fell 0.7 percent to close at 1,637 yen in Tokyo trading, extending this year’s decline to 10 percent. Nintendo rose 1.3 percent to 12,090 yen.
(An earlier version of this story was corrected to show Microsoft beat Sony in December console sales.)
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