As per the Research & Analysis division of analyst firm Forecasting & Analyzing Digital Entertainment (FADE) gaming on Xbox Live Arcade (XBLA) grew by double-digit numbers during the first half of the year, after a sluggish start in January and February which saw numbers down year over year. Overall, the XBLA market place grew 13% to $46.1 million USD by the end of June. June 2010 capped off the first half with an impressive 36% increase compared to last year's June 2009.
FADE reports that the major turning point in 2010 for XBLA came during the heavily promoted 'Block Party' event, which started in March and featured four titles: 'Toy Soldiers', 'Perfect Dark', 'Scrap Metal' and 'Game Room'. 'Toy Soldiers' and 'Perfect Dark' both took in over $2 million USD during the first half, placing each among the top five by revenue. The free-to-download classic title destination 'Game Room' also saw success, with over a million downloads shortly after release.
March started the positive trend, posting a strong 41% year-over-year increase in revenues, which began a consecutive 4-month run of double digit gains in revenue when compared to 2009. Starting in April, Microsoft began to aggressively promote price drops on dozens of titles, starting with the 'Inventory Blowout' sale which ran for one week in April, and included 10 titles. Throughout the second quarter, multiple sales were offered on titles, totaling over 40 titles offered on discount. These sales were seen as a success, as many titles saw revenue increases of between 50-200%. "We saw Microsoft take a very different approach to product deployment strategies this year," said Benjamin Schlichter, Director of Research and Analysis for FADE. "The second quarter of the year has traditionally been their weakest, and they made great strides to improve the performance during the period, as revenue increased 24% compared to the year prior during a period when much of the rest of the industry is down."
FADE maintains that Xbox Live Arcade will realize an estimated $130 million to $140 million by the end of the year, following strong hardware sales due to a solid holiday lineup, the new Slim console, and marketing for the motion-sensing Kinect hardware. Most notably, Microsoft's 3rd annual 'Summer of Arcade' is anticipated to be met with impressive sales, following the implementation of their new 'Destination Arcade' UI.
Kinect brings an air of unpredictability to the mix. FADE research believes that Kinect pricing may dampen sales for the hardware slightly, but the possibilities of the platform may yield impressive revenues for Arcade developers looking to leverage the new platform for mini-games and unique, affordable experiences.