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If you enjoy reading this site, you might also want to check out these Think Services sites:
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 GamerBytes (for the latest console digital download news.)
 Worlds In Motion (discussing the business of online worlds.)
 Game Set Watch (the Group's alt.game weblog.) |
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NPD: November Sees 'Blistering' 10 Percent Growth, 2 Million Wiis, Gears 2 Dominant
by Leigh Alexander
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December 12, 2008
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The video game industry saw November revenues up 10 percent over last year to nearly $3 billion -- even amid an economic recession, and despite the fact that last November had seven more post-Thanksgiving shopping days, the NPD reported today.
This brings the industry's revenues to date to $16 billion -- and according to the NPD's Anita Frazier, who describes this month's revenue performance as "blistering," the games biz is still on track to reach NPD's previously-estimated $22 billion for 2008 as a whole.
"One reason for the continued strength of the industry compared to other forms of entertainment comes from a number of sources," says Frazier. "Certainly, the expanded audience for gaming due to the availability of a wider variety of compelling content is a strong contributor."
Hardware
Hardware revenue was up 10 percent year over year to $1.21 billion, and 14 percent over 2007's year-to-date total.
The Wii was the victor in spades, selling an unprecedented 2.04 million units, over twice what it sold during November of 2007 when its supply was considerably more constrained
Nintendo's DS handheld sold 1.57 million units, followed by the Xbox 360 at 836,000 units. Having recently received a price cut, the Xbox 360 more than doubled the PlayStation 3's 378,000 units in November.
Sony's PSP beat its home console with 421,000 units, and the PlayStation 2 still made a showing with 206,000 units.
Wii - 2.04 million
DS - 1.57 million
Xbox 360 - 836,000
PSP - 421,000
PS3 - 378,000
PS2 - 206,000
"The expanded supply of Wii systems at retail was clearly evident in the sales figures this month," says the NPD's Frazier. "The 360 realized a nice unit sales bump over last November and the PS3 year-to-date unit sales growth is impressive."
"It's clear there can be more multiple victors this generation, and while price is certainly a strong factor, particularly as the current economic situation continues to prevail, the most important factor that will drive success in 2009 will be the line-up of compelling games that will keep consumers involved in the industry."
Software
Video game software grew 11 percent year over year in November, representing 31 percent growth in year to date sales.
Gears of War 2 topped the month's top ten, selling 1.56 million units in November, and the NPD pegs its attach rate to the Xbox 360's install base at 13 percent.
The Xbox 360 SKU of Call of Duty: World at War came in at a close second with 1.41 million units, and Wii Play still maintained its chart tenacity in third place.
The software top 10 for November is surprisingly broad-ranging:
1. Gears of War 2 (Microsoft, Xbox 360) - 1.56 million
2. Call of Duty: World At War (Activision Blizzard, Xbox 360) - 1.41 million
3. Wii Play (Nintendo, Wii) - 796,000
4. Wii Fit (Nintendo, Wii) - 697,000
5. Mario Kart (Nintendo, Wii) - 637,00
6. Call of Duty: World At War (Activision Blizzard, PS3) - 597,000
7. Guitar Hero: World Tour (Activision Blizzard, Wii) - 475,000
8. Left 4 Dead (Electronic Arts, Xbox 360) - 410,000
9. Resistance 2 (Sony, PlayStation 3) - 385,000
10. Wii Music (Nintendo, Wii) - 297,000
"After a soft introduction last month, Wii Music came back to score a spot on the top 10 list for the month," said Frazier, calling it a "testament" to Nintendo's marketing power and the Wii's brand equity.
Frazier also notes that Blizzard's World of Warcraft: Wrath of the Lich King sold 1.4 million during the month, its debut at retail.
She also speculates that the recession could actually be aiding video game sales: "Economic factors are also at play, given that a video game is a relatively inexpensive form of entertainment for the hours of value it provides," she says.
"Our Consumer Spending Indicator shows that video games is the category consumers are least likely to cut back on this holiday."
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How can WoW sell 1.4 million and not show up in the top 10?
Also Blizzard actually sent out a press release specifying they sold 2.8 million copies the first day, not 1.4 million on the month.
These are probably just differences in methodology, though I wonder why.
But come this time next year? That's gonna be a different story.
Actually, I estimate summer time 09.
Better enjoy it while you can.
I believe we will see a continued shift of spending from movies and music towards gaming due to the higher benefit/cost ratio that game products provide the buyer, in terms of value per dollar spent.
I also think we will see an increase in spending on smaller, cheaper games, like those on XBLA over big blockbuster titles that are priced in the $40+ range. Once again, the argument goes to the benefit/cost ratio as in many cases a $10 game might give you the a competitive number of play hours as a more expensive title. Most people will see it easier to part with $10 twice a month, than $40 in one transaction. Cash-flow issues during the recession will help further encourage this type of behavior.
Does anyone else see things working out differently in 2009?
Over the long run I do see people moving to downloadable games but only when the same games are available either at retail or download AND it is cheaper and more convenient to get on-line. I suspect these conditions are more than one year away still but I think they have little to do with the current economic situation throughout the world and more to do with publishers careful transition to download (not wanting to piss off their distributors who currently make up the bulk of their sales).
Next year will see smaller sales. If not because of the economy than because of titles launching next year. This year saw huge blockbuster titles (R2,Gears2,LBP,MGS4,GTA4,etc). There are a few big games due next year but not such a huge line up across all consoles. The combination of that and the economy means much smaller sales.