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Interview: NPD's Klotz Explains Top 10 Sales Pressure
by N. Evan Van Zelfden
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January 19, 2009
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"Basically, Pareto's Principle indicates that roughly eighty-percent of the effects of something comes from twenty-percent of the causes," explains NPD analyst Michael Klotz to Gamasutra in an exclusive interview examining U.S. game retail trends.
Following December 2008's NPD results, he discussed a key trend that's changing over time: "Looking at game sales from 2000 to 2008, 29 percent of the SKUs [individual game releases by format] that were in the market accounted for 80 percent of the sales."
"Looking forward to year-to-date 2008, it's actually down to 20 percent," continues Klotz. "Another way of looking at this is by examining the top 20 SKUs per year."
According to NPD data, in 2005, the top 20 SKUs accounted for 11 percent of the total unit sales. In 2008, the top 20 SKUs accounted for 18 percent of the total unit sales, NPD has found.
"You're really seeing that those top hits are the most important thing in the industry. And getting into that top-tier release is more important than ever before."
When Klotz looks at platform-by-platform, the Wii numbers are most significant. "13 percent of the SKUs that were released on the Wii account for 80 percent of the sales." The other platforms, he says, are closer to the 80/20 principle.
And in 2008, Wii produced some especially stunning numbers, according to Klotz: "When you're looking at the Wii, what's really interesting is, when you look at 2008, the top ten SKUs accounted for 44 percent of the sales. There were 432 titles available in the market for the Wii... strictly retail."
"You're looking at 422 titles that are competing for the remaining 56 percent of the sales," Klotz tells Gamasutra. He compares that to the PS2, PS3, and Xbox 360, where the top ten games only account for 31 percent to 32 percent of the sales.
"Those top ten games are such a huge piece of the Wii business," says Klotz. "And if you look at the top ten titles for the Wii, it's Mario Kart, Wii Fit, Wii Play.
"It speaks to the amazing job Nintendo does, producing games for their own platforms," concludes Klotz.
The highly hit-driven business is tough for developers, Klotz tells Gamasutra, concluding: "There aren't as many games that are selling a lot of units... To become one of those industry-driving titles is becoming tougher. Especially on the Wii."
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It lacks on both from third parties, and that reflects on sales.
The only thing third parties are doing on Wii so far is flooding the market, jeopardizing their own market (by letting less shelf space for good games to sell many units).
I would gladly give my money to 3rd party developers on the Wii, if they didn't view it as a PS2 dumping ground and actually gave it some serious effort.
It bothers me that even the games that have potential, are either branded as accessible, or they are handed off to a lower-tiered developers on the cheap. Many 3rd games fall into both of these areas. I wouldn't mind the accessibility part if it didn't equate to being dumbed-down, which is how most 3rd party developers handle it.