As expected, the U.S. retail video game industry returned to growth with the release last week of March 2010 sales figures by the NPD Group. Outside of December 2009 – when revenues grew by a modest 3.9% – and September 2009 – when revenues were flat – the industry has experienced mostly double-digit year-over-year declines.
Simultaneously Sony's PlayStation 3 has finally demonstrated that it has the strength to dominate the software scene. Consider this simple comparison: more money was spent on PlayStation 3 software in March 2010 than November 2009, even though the latter is one of the biggest shopping months of the year.
However not all is well in Sony's house, as its PlayStation Portable (PSP) was bested by the Nintendo DS platform by a nearly 6-to-1 margin in hardware units and an 8-to-1 margin in software dollars.
Below we'll cover all these nuances beneath the top-line figures and try to provide some insight into where the industry will go from here.
While total revenue was up for the month compared to March 2009, only the software and accessories actually realized increases. Even though 157,000 addition systems were sold in March of this year, downward pressure on hardware prices depressed revenue further.
According to Anita Frazier, analyst for the NPD Group, console hardware prices were down 16% year-over-year in March 2010. However, average handheld hardware prices were up over 10% year-over-year in February 2010 (two months ago), according to data provided exclusively to Gamasutra, and we expect that average handheld hardware prices increased further last month with the introduction of the Nintendo DSi XL at $190.
Out of this mix of shifting hardware unit sales and prices, we see that the total money spent on hardware in March 2010 dropped nearly 4% to $440.5 million.
Figures for all segments, along with year-to-date (YTD) figures, are given in the table below.
Software revenue was up 10% in March, based on an 11% growth in unit sales with a very modest 0.5% decline in average prices. That's the first real growth in the software segment since February 2009 over a year ago.
Although data for March 2010 was not available as of this writing, data provided to us on accessory sales in the first two months of 2010 reveals that the situation is quite different in that segment. In particular, accessory prices were up 13% year-over-year through February. However, given that that segment has seen only single-digit growth in its revenue, there must have been a corresponding 10% or more decline in unit sales.
Finally, we note that the data provided by the NPD Group does not reflect sales of games, add-ons, or subscriptions purchased through online outlets like Xbox Live, the PlayStation Store, or the Wii Shop channel. The lack of hard data on this segment of sales will continue to blur our view of the state of the industry, especially as that segment inevitably grows in the coming months and years.