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Why Gamasutra is skipping monthly NPD reports
Why Gamasutra is skipping monthly NPD reports
June 17, 2013 | By Kris Graft

June 17, 2013 | By Kris Graft
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Hey Gamasutra readers,

I just wanted to drop a quick note to say that for the foreseeable future, we won't be running the regular monthly NPD Group sales numbers for U.S. video game retail.

Many of our readers know that the NPD's monthly public reports focus primarily on U.S. physical retail, and headlines often say how the game industry is in decline, when in fact it's new physical game retail in the U.S. that's declining, not the industry as a whole. The NPDs, as you may understand, do not paint a 100 percent accurate picture of the health of the game industry today.

NPD obviously knows the importance of tracking and reporting revenues from digital venues, such as paid downloads, subscriptions, mobile, etc., as well as used game and rental revenue: The company now includes monthly estimates for these streams. But the way that publishers and digital distributors like Steam lock down their sales data, it's hard to imagine anyone making accurate estimations of sales by title, or even overall digital sales.

The fact that NPD only focuses on U.S. sales is also an issue -- some of the biggest players on digital platforms are internationally-operating companies like Blizzard, Riot, Supercell, DeNA and Rovio.

Additionally, a while back NPD stopped reporting on software unit sales in its monthly report, leaving us questioning for some time, "What's the point?" So as editor, I need to ask myself if the monthly NPD figures paint a truthful picture of the video game industry -- does conveying monthly NPD releases to our readers help in their day-to-day decisions? I have to say "no." I've seen on Twitter and in Gamasutra comments that a lot of our readers also answer "no." Even the president of the Entertainment Software Association, Michael Gallagher, agrees that the monthly NPD U.S. retail figures hold little value these days.

As a resource for the game industry, it's not enough for Gamasutra to disclaim monthly NPD articles in the phrase, "Keep in mind, these are only physical, new U.S. retail sales." We probably should have stopped running the figures (particularly the software sales figures) a little while ago, honestly.

This isn't meant to bash the NPD at all -- I don't envy its very difficult position, to be in a business of numbers when many of the most important numbers are locked down so tightly. Everyone can agree that transparency of sales data is an ongoing issue. Our in-house analyst Matt Matthews still plans on working with NPD from time to time for in-depth analyses, putting physical hardware and software sales in better context than NPD's bare monthly releases.

If it makes sense for us and our readers, we will use NPD as a resource for hardware sales figures, as those are easier to track than say, a U.S.-based in-app purchase in Hay Day. We'll all be watching closely how next-gen hardware sales pan out. And if the NPD is able to transition its reporting more towards a digitally-focused industry, we'll gladly reconsider its sales data. Surely (I hope), NPD is working to resolve this. But who knows what the future holds there.

Thankfully, we've been seeing a lot of developers coming onto Gamasutra, sharing the sales figures that they get from their distributors, and analyzing those trends. Those analyses are extremely helpful to your peers, so I hope you keep them coming. We may not be able to get broad, overarching sales numbers for the entire industry, but we have enough patches of data where we can drill down deeper, and get some helpful takeaways.

Thanks for reading.
Kris Graft (@krisgraft)
Editor-in-Chief, Gamasutra.com


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Comments


Dane MacMahon
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Not only is it perhaps not relevant to gaming as a whole anymore, it can be actively misleading despite accurately reporting on its particular market sector. For example it always makes my fist clench a bit when I read stuff like "PC sales accounted for only 10%" when that information is based on US boxed retail, which is meaningless for that platform.

Even when the NPD data is used with the right frame of mind... console US boxed retail... it spreads misinformation because of what it lacks.

Dave Voyles
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Thank you for taking this stance, Kris. I appreciate it, and I'm sure others do to.

I just can't seem to justify the relevance of NPD numbers whey they are missing a piece of the puzzle. And how large of a piece, is completely unknown too, which further compounds the issue.

What percentage of game sales are digital now? Everything is a shot in the dark until places like Valve and Blizzard open it, and it's doubtful they ever will. (Rightfully so).

John Flush
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Great decision. All the NPD articles would generate is complete lack of faith in said system.

Steven Ulakovich
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I agree with this stance, and applaud it greatly.

If the industry will continue to buck the concept of transparency that we see in every other entertainment medium, then there is no reason to tout any sales number unless it comes from the horse's mouth.

Alex Covic
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Just today, I have seen websites milking 'stories' out of the NPD numbers, to generate 'traffic'. It is so convenient and easy ... and so misleading.

I applaud you guys, for doing the bold thing. For doing the right thing.

Analysis, context ... makes all the difference. I rather read some Indie-devs experience with sales of his/her game (which people, amazingly enough, share around here) or an analytical interpretive dance 'about' the latest numbers and what they say and DON'T say, by Matt Matthews (which he did well in the past, btw - always adding context, always skeptical about the 'truth' in those digits). And you can now save some money too.

NPD and Nielsen ratings ... they cannot keep up. They had their time. You cannot count, what you don't see.

Bob Johnson
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IT was fun when they could actually report numbers. And it was fun when the console wars weren't decided yet. The fun ended a few years ago.

And then yes there are more digital sales than ever. Still if they went back to reporting numbers once the nextbox and 4playstation launch I'd be back to eating a bowl of popcorn the first or second Thursday of every month.

Alexander Brandon
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It used to be that individual companies reported sales and those sales were believed by publications. It is increasingly complex to track sales particularly with microtransactions, but I really like the blog posts with detailed marketing and sales data on indie releases. Whatever you can provide in terms of numbers will be illuminating and I fully agree with this decision, just as I was all for not printing anything Michael Pachter says because it was proven more than half of his predictions ended up being completely false. ;)

Jakub Majewski
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Makes sense, Kris. It's just a pity that there's no better alternative - that instead of replacing virtually useless NPD reports with actually-useful reports from somewhere else, the only option is to hope that publishers will step in to share their own figures (...and that they'll be honest about it).

It seems as though the industry will be impossible to measure for years to come...

William Swaney
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I don't know, I think it's a bad decision. We all know what the numbers represent, this fear of how they're construed can't be worse than how ignoring the numbers makes it look like the industry is "circling the wagons" and putting its head in the ground.

Bill

Kris Graft
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Hi Bill,

We're not ignoring industry sales data. Matt Matthews is too obsessed with numbers to let that happen (as stated in the post, from time to time, he'll be putting them in more meaningful context than the NPD's monthly report)!

If someone would enlighten me on exactly _how_ they use monthly NPD data to make business decisions these days, or why that sales data is valuable to them, I'm happy to listen. But from where I'm sitting, our readers who make and sell video games don't find them terribly useful (and I'm talking about the publicly-released monthly reports that don't even provide unit sales anymore). Seems that devs big and small back this decision.

Joe Zachery
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I agree William!

This smells of if we don't talk about then it's not really happening. Software is in decline for years now. Major releases have bombed at retail, and companies are closing left, and right. The NPD gives you at least a look into the current trends of the industry.

Bob Johnson
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The NPDs do seem to give a relative view of the industry even if they aren't indicative of total health although without numbers they aren't as interesting.

Still it isn't like Gamasutra has to do much work to put up a blurb about NPDs once a month. I can exercise my own right as a reader to click on the report or not. My interest waned the past few years so I really haven't commented much on the NPDs or even read them. But the upcoming release of the nextbox/4playstation could change that.

Camilo R
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I don't think it's a problem so long as it's taken for what it is. It definitely should not be taken as a "picture of the video game industry", but it's still relevant. It may however not be worth doing a detailed report on for this website.

James Yee
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*Applauds!*

Peter Skerritt
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Deleted with apology to the site and its staff.

Kris Graft
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From the article:

"Our in-house analyst Matt Matthews still plans on working with NPD from time to time for in-depth analyses, putting physical hardware and software sales in better context than NPD's bare monthly releases.

"If it makes sense for us and our readers, we will use NPD as a resource for hardware sales figures, as those are easier to track than say, a U.S.-based in-app purchase in Hay Day. We'll all be watching closely how next-gen hardware sales pan out."

John Paduch
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"He writes a minimum of 2 Armchair Analysis columns per month, generally discussing and breaking down NPD sales data."

Taken from Peter Skerritt's public linkedin profile. Gee, I wonder why you're angry at one of the biggest industry news sites dropping the focus on NPD? Shiiilllllllll....

Kris Graft
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Thank you Peter.

Brent Thale
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Lol, go back four years to this article and read the comments below it, specifically the ones from me: http://www.gamasutra.com/view/feature/
132602/npd_behind_the_numbers_november_.php

I love the snarky responses to my point telling me how absolutely wrong I was about NPD, and Gamasutra today confirms which was already a recognizable trend in 2009 by saying "We probably should have stopped running the figures (particularly the software sales figures) a little while ago, honestly." Uh, yeah.

Jakub Majewski
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But Brent, back in 2009, you were absolutely wrong...

Reality has only rendered NPD data obsolete in the last year or two. In 2009, it was still a valuable measure because the retail sales were a far bigger chunk of the pie back then.

Nooh Ha
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Kris,

Will a similar logic be applied to other market size estimates and the companies that provide them? Many of these companies employ the same sample-based survey methodology as NPD does for its "digital" estimates. In my experience these are deeply flawed and highly susceptible to serious inaccuracy as several have already proven.

NPD's point-of-sale methodology is the most accurate way of measuring retail data but if their decision to reduce how much is revealed means there is little to convey to us readers then I can understand you wanting to pull this. However, if there is still useful information, however niche, I think it should remain - with the requisite caveats.

Kris Graft
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If there is information that is useful/accurate, we will still make sure to report on it. For example, Nintendo sometimes releases both physical and digital sales numbers -- physical provided by NPD, digital from internal measurements. That's useful, and paints a more accurate picture.

What I don't find useful or complete (and what this article addresses) are NPD's monthly reports released to press, which typically have no unit sales data for anything anymore, with a top 10 chart that is purely new physical retail, and a questionable dollar sales estimation that takes digital sales into account.

This was not some random decision I made. The large segment of our readership that makes and sells video games has been becoming increasingly disenchanted by monthly NPD reports and the incomplete picture they paint. That growing sentiment added on to my own ongoing reservations, so here we are.

Nooh Ha
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Given that the dollar amount per title is never reported (presumably due to NPD restrictions), then I agree there is little of value to relay to us.

I also share your scepticism of the "digital" estimates but hope that similar scrutiny is applied to other research companies providing market size estimates as most employ precisely the same methodology as NPD with its "digital" data and some of these with smaller sample sizes.

Michael Wenk
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Fine, don't report. I'll get my info from other news sources. And while I understand digital isn't covered by NPD, it still is a small portion. Not everyone in the country has broadband, hell not even all the cities have good broadband. I'm finding it odd that you're not considering the many people that don't have reliable fast internet, that still go to either Gamestop or Best Buy. Oh, those guys are on digital? Then how come what digital numbers we do have don't show the same increase as the decrease from retail? Oh, that's right, because the games industry is in a nice recession.

Kris Graft
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Digital is only a small portion, eh?

Anyway, *again* as stated in the article, we (ie Matt Matthews) will analyze NPD figures and put them in context when it makes sense to do so. We are however skipping the barebones monthly reports. If you somehow find those reports crucial to your decisions as a professional who sells and makes video games, I encourage you to visit a site that will continue reporting on those figures.

For our part, I've yet to hear an objection from anyone who actually sells and makes video games. The response from our core audience has been wholly positive.

Michael Wenk
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I wouldn't expect you to hear from anyone who sells or makes games. They'd have every reason to gloss over it. However, I don't really understand why, as the people they really don't want to hear or read negative news, Ie the investor is likely to easily get bad news from other sources.

But in the end, whether you choose to report it or not, the industry will be what it is, and ignoring it won't change it.

Matt Ployhar
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Kris - I support your decision. Didn't think you'd have to defend it so vehemently though.

I've been tracking NPD data since '99. They unquestionably have the best quantitative data sets out there. However; you're very right in pointing out its limitations. US only, retail, and so forth. As the US shrinks in overall market segment share (MSS%), and retail goes the way of Blockbuster & Tower Records - so to does the relevance of the data. Granted - data wonks like me still like to see the 'quant' data sets but as we all know it's not free. If anything though... it's an interesting health indicator for the state of boxed retail-game sales.

A shame everyone isn't running around with their heads on fire screaming that 'Consoles are dying' based on a small slice of NPD data eh? Like what happened to PC many moons ago. A shame that NPD can't get it's hands on a more holistic global view of: Digital, Subs, All the Free to Play/Microtransactions based economies, streamed games, scratch game cards, and the like. What a difference a decade makes - times have definitely changed in the gaming industry.

Kris Graft
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Hey Matt! Thanks for the support. This comment thread might seem like I've needed to defend the move quite a bit, but people (like you, our core audience) who work on and sell games for a living have been 100% supportive of the move on twitter and email. Most complaints seem to have come from a segment of folks who are simply passionate about the competitive aspect of measuring retail sales data.


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