Strong Performance of Video Games in 2018 Sets High Bar for 2019

 In Analysis, Console, Forecast/Sales, PC

DFC Intelligence just released its latest assessment of top 2019 video gamesThis also included an analysis of 2018 releases.  Overall, 2018 was a very strong year for video game releases.  Of course, this means sales in 2019 could struggle to match the previous year success.

The recent DFC Intelligence forecasts for the video game console market indicate that sales will be flat in 2019.  Much of this estimate is based on bottom-up forecasting using sales analysis of individual titles.  Right now, the 2019 lineup simply is not looking as strong as 2018.

Of course, we are early in the year and major shows like the Game Developer’s Conference (GDC) next week and E3 in June have not occurred.  However, as these shows decline in importance for new product announcements, we are cautious about expecting any major surprises.  Right now, it appears 2019 will have a hard time living up to 2018.

There were some major titles in 2018 that smashed expectations.  Games like Red Dead Redemption 2 and Super Smash Bros. Ultimate were expected to have strong sales and they did.  However, other games did better than expected.  Some titles that exceeded expectations included:

  • Marvel’s Spider-Man: Spider-Man was expected to do well, but we were skeptical that this PlayStation 4 exclusive could hit the 10-million-unit mark. It did.
  • Super Mario Party and Pokémon: Let’s Go Pikachu!/Eevee!: We knew Smash Bros would be big, but in its latest financial report Nintendo announced by the end of 2018 Super Mario Party had sold 5 million units while the Pokémon titles had sold a combined 10 million units. At 12 million units in less than a month, Smash Bros quickly passed the launch title The Legend of Zelda: Breath of the Wild in sales.
  • Monster Hunter World: This title became one of Capcom’s biggest success stories. This includes a very strong launch on PC later in the year.
  • Farming Simulator 19: In the age of free farming simulations, this is a lesser known regular title that is setting records on both PC and console systems.
  • Assassin’s Creed: Odyssey: This is a franchise that has struggled in recent years.  It made a comeback in 2017 with Origins.  Odyssey sales proved this comeback was not a fluke.
  • Octopath Traveler: Square Enix had a mixed year but this Switch RPG was a highlight. It sold very well but it is most notable for bringing an audience expanding genre (Japanese RPG) to the Switch.  This title highlighted the Switch’s portable features for an older audience.
  • Far Cry 5: This spring 2018 title helped get the year off to a strong start.
  • Call of Duty: Black Ops 4 (aka IIII): This title did very well even it did not meet company expectations.  The fact that sales tripled on PC is a very strong sign as the market for high-end PC hardware starts to expand.

Of course, 2018 was not without its share of disappointments.  The biggest disappointments of the year were Bethesda’s Fallout 76 and Electronic Arts’ Battlefield V.  Some analysts blamed the success of Fortnite for the performance of these titles.  Based on strong sales for other products DFC disagrees.  Gamers have become pretty sophisticated and these products simply did not live up to expectations.

It was also a bad year for collectibles.  The card games Artifact from Valve and Gwent: The Witcher Card Game from CD Projekt underperformed.  However, CD Projekt did pull a reverse Fortnite by spinning out the single player Thronebreaker: The Witcher Tales from Gwent.

Arena of Valor was Tencent’s attempt to bring a hit China MOBA free-to-play game to the Switch.  Consumers simply were not biting.  On the physical collectible side, Ubisoft’s Starlink: Battle for Atlas was an expected flop and showed why major brands like Disney and Lego have exited the toys-to-life space.  By 2019, inventory of Starlink was being widely discounted from $75 to $25.

Many smaller titles did not meet more modest expectations.  This included Darksiders III which many investors were watching to see the potential of up-and-comer THQ Nordic.

There were also many ports of products to the Nintendo Switch that died as expected.  Some Switch ports that are interesting include Civilization VI, Elder Scrolls V: Skyrim and Stardew Valley.  However, the later two launched in late 2017.

Overall, 2018 was a solid year for high-end game titles.  The 2019 lineup is simply not looking as strong.  Major publishers Activision Blizzard and Electronic Arts are barely releasing new games.  Already EA’s Anthem has proven a dud.

Star Wars Jedi: The Fallen Order is expected to be a big end of year title for Electronic Arts.  However, its developer, Respawn Entertainment, has a sudden hit on its hands with Apex Legends.  DFC will provide some more analysis on this soon, but we have concern that Apex may take some resources from The Fallen Order.

Right now, DFC is conservatively forecasting 2019 high-end video game sales (games for console and PC) to be flat.  One area that is likely to be up is digital subscriptions and microtransactions.  This is helped by games like Fortnite and Apex Legends.

Much of the year’s performance will depend on the first-party titles.  Sony and Microsoft appear to have a very strong slate, but we still need to see what is actually launching in 2019.  Nintendo’s lineup for the Switch currently looks modest, but often new products are not revealed until June.

 

 

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