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NPD: Behind the Numbers, August 2009

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NPD: Behind the Numbers, August 2009

September 14, 2009 Article Start Page 1 of 5 Next

Last Thursday, the NPD Group released its latest estimates for retail videogame sales in the United States during the month of August 2009. As predicted by many analysts, sales were down again compared to August of 2008, but there were signs that the industry could have passed an inflection point – or even a local minimum – and was headed for growth again in September.

This month we'll focus on several key areas. We'll look at pricing of console hardware, specifically Sony's PlayStation 3 and where Microsoft and Nintendo go from here. Madden NFL 10 sales were below expectations, and we'll examine the retail prospects for Activision's port of Call of Duty 4 for the Wii.

Finally we'll explain how the industry is likely to miss $20 billion in revenue for the year – down from the high of $21.3 billion in 2008 – and add some comments on the outlook for the rest of the year.

Industry at a Glance

Industry revenue for August 2009 dropped $176 million dollars compared to the same month in 2008, a decrease of 17%. While the figures are scary, they're actually an improvement from July when year-over-year industry revenue dropped a staggering $340 million – or 29% – from the figures for July 2008.

To the extent that the loss was smaller, both in absolute and relative terms, the industry fared better in August than it did in July. These readings are the basis for much of the turnaround speculation surrounding September's sales.

August 2009 At a Glance

One segment of the industry, accessories, actually demonstrated growth over 2008. All other segments were down, with the hardware segment particularly hard hit with revenue down almost $100 million for the month.

Software was down 15%, or about $80 million, in August. At least a quarter of that differential, or $20 million, could be theoretically attributed to disappointing sales of the month's big software release, Madden NFL 10.

We again offer the caveat that the NPD Group's figures cited here only include retail sales and do not include sales of software and content offered through the online storefronts on each current generation console and some handhelds.

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Thomas OConnor
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"We again offer the caveat that the NPD Group's figures cited here only include retail sales and do not include sales of software and content offered through the online storefronts on each current generation console and some handhelds."

So how does one go about discovering figures for any of the digital storefronts, particularly the handhelds?

Ryan Langley
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@Thomas - It just so happens that Gamasutra (via its sister site GamerBytes) does a detailed analysis of the Xbox Live Arcade and PlayStation Network sales each month. The articles for this month can be seen here:

And here:

Unfortunately WiiWare and DSiWare have basically no way of telling how well a game may be selling, which is an unfortunate shame.

Andrew Dobbs
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Does revenue of digital sales (including iPhone) offset retail revenue? I know in other media, revenues from online and digital products haven't always matched what used to exist in print.

For example, whatever craigslist makes doesn't equal what newspapers used to make off classifieds. And it takes a lot of $2.99 iPhone purchases to match the revenue of one $60 game.

I'd love to see more on Gamasutra about how the transition to digital distribution is impacting the industry, but maybe the data just isn't public knowledge. It's kind of weird to think this about an industry built on computing technology, but games may be the last major entertainment and media industry to feel the full impact of the transition to digital goods.