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NPD Results, December 2010: Industry Down 9% For December, 5% For Year
NPD Results, December 2010: Industry Down 9% For December, 5% For Year
January 13, 2011 | By Kyle Orland

January 13, 2011 | By Kyle Orland
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More: Console/PC



Tracking results from the NPD Group for new U.S. retail video game sales in December showed industry revenues for the important December sales period shrinking 9 percent compared to the same month last year, leaving the industry down 5 percent for the entire year.

Just over $5 billion in December spending on new hardware, software and accessories at retail contributed to $18.58 billion in new retail sales for the year, down 6 percent annually. With PC game sales included, however, that number rises to $19.3 billion, just a 5 percent decline from last year.

"This year, declines in portable and console game sales were offset by new physical PC game sales, which increased by 3 percent, and increases in the consumer spend occurring via digital download, mobile gaming apps, social network games, and used games," NPD analyst Anita Frazier said. The NPD Group said it plans to issue a final analysis of 2010 in March.

“December 2010 represented one of the strongest monthly performances the industry has ever had at retail," said Entertainment Software Association president Michael Gallagher. "It was a robust finish to a year marked by innovation and engaging millions of consumers through a multitude of delivery models."

Hardware

Sales of $1.84 billion in hardware in December 2010 -- down 16 percent from 2009 -- led the industry to finish 2010 around 13 percent behind 2009, at $6.29 billion in hardware sales.

While NPD no longer reveals hardware sales numbers for all systems, Microsoft announced the Xbox 360 was the only system to see year-over-year sales growth in 2010, rising 42 percent above 2009's unit sales. That rise includes 1.86 million units sold in December 2010, making the month the best ever for Microsoft's system, according to NPD.

[UPDATE: Nintendo trumpeted sales of 2.36 million Wii systems in December 2010, down 38 percent from the same month last year. Despite the decline, that figure still snaps a six month streak for Microsoft's system atop U.S. retail home console sales. The Wii also led home console hardware sales for the year, with over 7 million units sold.

Xbox Group Product Manager David Dennis told Bloomberg Microsoft's hardware position slippage was due to previously reported supply constraints for the month. “We air-freighted stuff in December, but you can only see as many as you can make," he said.]

Nintendo also revealed the Nintendo DS sold 2.5 million units for the month and over 8.5 million for the year.

Sony, for its part, sold 1.21 million units in the month, according to the L.A. Times, down 11 percent from December 2009.

The Nintendo DS led hardware sales for the month, NPD revealed, finally surpassing the PS2's total installed base with sales of 47 million units overall, by NPD's calculations.

Software

For December, total new retail software sales, including PC games, were down 5 percent to $2.53 billion. That number was buffered somewhat by strong PC software sales growth of 62 percent in the month, thanks mainly to Activision Blizzard's World of Warcraft: Cataclysm, the third-best-selling overall game for the month.

Activision Blizzard's Call of Duty: Black Ops once again led monthly software sales this month, with somewhere north of 3.6 million sales across five platforms.

Number two Just Dance 2 and number four seller Assassin's Creed: Brotherhood helped Ubisoft join Activision in rounding out the month's top four sellers, with number eight seller Michael Jackson: The Experience also ranking for the publisher.

When single-system SKUs are separated out, NPD revealed that non-traditional titles including Microsoft's Kinect Sports and Dance Central and THQ's uDraw Tablet software (which comes with the included hardware) make the top 10 list.

"Outside of Black Ops and Assassin’s Creed, the top list on both a SKU and title level basis reflects an array of content that is appealing outside the core audience for gaming that you might expect to sell well during the holiday timeframe," Frazier said.

The Top 10 new retail sellers in the U.S. for December 2010 (with sales combined across systems) were as follows:

1. Call of Duty: Black Ops (Activision Blizzard) - Xbox 360, PS3, Wii, DS, PC - over 3.6 million
2. Just Dance 2 (Ubisoft) - Wii
3. World of Warcraft: Cataclysm (Activision Blizzard) - PC
4. Assassin's Creed: Brotherhood (Ubisoft) - Xbox 360, PS3
5. Donkey Kong Country Returns (Nintendo) - Wii
6. Disney Epic Mickey (Disney Interactive Studios) - Wii
7. Madden NFL 11 (Electronic Arts) - Xbox 360, PS3, Wii, PS2, PSP
8. Michael Jackson: The Experience (Ubisoft) - Wii, DS, PSP
9. NBA 2K11 (Take-Two Interactive) - Xbox 360, PS3, Wii, PSP, PS2, PC
10. Need for Speed: Hot Pursuit (Electronic Arts) - Xbox 360, PS3, Wii, PC

Sales of new retail software, including the PC, reached $10.1 billion for the year, down 5 percent from 2009's mark of $10.6 billion. When used game sales, rentals and digital revenue streams are included, NPD estimates money spent on games would hit between $15.4 and $15.6 billion, which is flat compared to 2009.

Between them, Cataclysm and Starcraft II led new retail PC sales for the year, representing 14 percent of such sales for the period.

“The dynamics of games content purchasing changed dramatically in 2010 with options ranging from the physical product to digital downloads on connected devices as well as in-store digital kiosks,” said NPD analyst Anita Frazier. “The increasing number of ways to acquire the content has allowed the industry to maintain total consumer spend on content as compared to 2009, and we should expect 2011 to be a growth year in the games industry as the consumer demand for gaming continues to evolve.”

Call of Duty: Black Ops was also the top-selling title for the year, selling more than 12 million units to come in twice as high as number two seller Madden NFL 11. This concentration of sales in one title did not extend to the entire top 10, which represented roughly the same proportion of total industry software sales as 2009, according to NPD.

Three of 2010's top ten sellers -- New Super Mario Bros. Wii, Wii Fit Plus and Call of Duty: Modern Warfare 2 -- were actually released in 2009, indicating an extremely extended sales life for at least a few of the year's biggest hits.

The Top 10 new retail sellers in the U.S. for all of 2010 (with sales combined across systems) were as follows:

1. Call of Duty: Black Ops (Activision Blizzard) - Xbox 360, PS3, Wii, PC, DS - more than 12 million
2. Madden NFL 11 (Electronic Arts) - Xbox 360, PS3, Wii, PS2, PSP
3. Halo: Reach (Microsoft) - Xbox 360
4. New Super Mario Bros. Wii (Nintendo) - Wii
5. Red Dead Redemption (Take-Two Interactive) - Xbox 360, PS3
6. Wii Fit Plus (Nintendo) - Wii
7. Just Dance 2 (Ubisoft) - Wii
8. Call Of Duty: Modern Warfare 2 (Activision Blizzard) - Xbox 360, PS3, PC
9. Assassin's Creed: Brotherhood (Ubisoft) - Xbox 360, PS3
10. NBA 2K11 (Take-Two Interactive) - Xbox 360, PS3, PS2, PSP, Wii, PC

Accessories

NPD dubbed December 2010 "the biggest month for accessories sales in history," up 10 percent from December 2009 to represent over $853 million in accessory sales. For the year, accessory sales were up 13 percent to $2.93 billion.

Unsurprisingly, NPD attributes the rise to "a hefty increase in the average retail price driven by specialty controllers," including the Kinect, which was the best-selling accessory for the second month in a row and also for the entire year.

Point and subscription cards sold in stores saw the largest unit volume increase among accessory types in 2010, pointing to the increased relevance of digital sales in the video game market.


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Comments


Mark Harris
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Solid month for everybody, sounds like, which is always a good thing. Very interesting to hear the NPD projections that 2010 is flat vs. 2009 when taking into account total consumer spend (which includes digial content purchases).



Slow but sure progress toward digital purchases, hopefully as this scales vs. physical retail we'll see prices come down and models shift toward volume vs. pure margin.

Joe McGinn
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How do you figure that Mark? Aside from Kinect, everything is down from last year. For boxed product I see more of the same, and worse in the future. The retail game business will be as extinct as record stores and video stores in five years.



Fortunately these to not represent loss of gaming revenue overall, just less use of reatail channels, more than mde up for by digital sales.

Mark Harris
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I said solid, not good or great or fantastic. When projections are flat vs. last year late in the console life cycle (hence lower revenue per unit sold) in a limping economy I think it's safe to say it was a solid year.



Xbox is up over last year, and Nintendo still sold more in Dec despite being down. The PS3 is down revenue wise for Dec but they are up rather significantly on software sales and attach rate YoY (according to the last numbers I heard), and even being down they sold over a million units during the month. Honestly, selling 11% less YoY compared to a holiday following a price cut isn't all that bad. As you said accessories are up significantly.



Regardless, the industry as a whole, including digital purchases and PC retail (up YoY) is projected to be flat vs. last year. In my opinion that's a solid performance, not especially good or bad.

John Gordon
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Seems like the NPD keeps changing the format of these reports. A few months ago they stopped reporting numbers and combined the multiplatform titles together in the top ten. Now they are including PC games, while the report was console only before. Who knows what the NPD report will look like next month?

Tim Tavernier
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"This industry has a problem, which nobody seems to see."



Owh, there are people who have seen it for years (me included), it's just, they get ignored all the time because of that same fact. Even when faced with cold-hard evidence and numbers, the gaming analysts and journalists ignore it.



It's my fault they're all incredible unprofessional.

Peter Warman
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For a more complete picture of the software sides of things including console, PC/Mac, social, casual, mobile, MMO gaming check out Newzoo's free Total Consumer Spend 2010 Report. It shows growth/decline per segment. www.newzoo.com/totalconsumerspend2010. If the NPD estimates 10.5bn on new retail sales and only 5bn for rental, pre-woned as well as all online gaming revenue streams I think somebody is underestimating the (speed of) growth in casual, social, MMO, digital distribution. Newzoo states $12.7bn spent on consoles (total) and PC/Mac (boxed) being 52% of total consumer spend on games. How does NPD divide the $5bn amongst second-hand trade, rental market, DLC (consoles), digiatl downloads (PC/Mac), social games, mobile games, casual websites and MMOs?

Russell Carroll
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Certainly consoles are in transition...



...but I don't see as much doom and gloom as some.



It was a great year, with great games and some great sales numbers.



Notably:

- X360 had its best year ever...in it's 5th year on the market! (unprecedented!)



- Wii had its 2nd best hardware month EVER in December 2010, and it's 4th month of 2million+ consoles sold (the PS2 had just one month selling 2million+ for comparision)



- The PS3 US numbers eclipsed the lifetime sales numbers of the original Xbox in December. (which means all 3 systems are successful!)



- A 3rd party Wii game was the best selling Wii game of Christmas (dogs & cats living together...mass hysteria!)



- More consoles have sold THIS generation than any other generation EVER (74 million and counting vs. 72 million for last generation). ...and sales are still going up!





The numbers for December 2010 are down versus last year, but last year December was the best month in industry history, it's a pretty impossible comparison. However, there is also a lot of good facts that you can pull out of this that shows this is a golden era of console gaming that we're likely to remember fondly in years to come. I doubt we'll ever see another generation of hardware sell anywhere close to the units this generation has sold (and will still sell!).

Christopher McClatchey
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Two things:

First, I have to suspect the NPD's numbers, as WoW:Cataclysm reportedly sold 4.7 million copies in December, far more than CoD:BLOPS' 3.6 million on all platforms. Heck, both Cataclysm and Starcraft 2 should show up in the overall sales top ten, yet they are nowhere to be seen. (For reference, NSMB Wii, #4 on the chart, has sold more than 4 million copies in the US - in both 2009 and 2010.)



Second, the Playstation 2 was a phenomenon. It sold ~150 million copies. But the Xbox and Gamecube both sold only ~20 million copies apiece.

In contrast, the current generation consoles are all sitting on at least 40 million copies sold - 360 has 50 million, PS3 41.6 million, and the Wii has 76 million. While the combined total of these sales does not approach the 200 million sales of the last generation, it doesn't really have to. The PS2 was an aberration, not an industry trend, and the lack of such a mega-seller this time around does not point to a broken trend, but a return to normalcy - a normalcy where the weakest-selling current-generation platform has still sold twice as much as it had a chance to last generation.



As an interesting fact, the PS2 hit 100 million sales in 2005. This is comparable to the time that has elapsed in the current hardware generation, bringing the five-year generation sales to approximately 140 million. The five-year generation sales this time around? 166 million. Weaker? I think not. There's simply no perfect-storm console this time around, and the companies get to SHARE the rewards, rather than Sony taking home the whole pie.

Tim Tavernier
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"As an interesting fact, the PS2 hit 100 million sales in 2005. This is comparable to the time that has elapsed in the current hardware generation, bringing the five-year generation sales to approximately 140 million. The five-year generation sales this time around? 166 million. Weaker? I think not. There's simply no perfect-storm console this time around, and the companies get to SHARE the rewards, rather than Sony taking home the whole pie."



This would be true if not for the fact that the buying audience is radically different then last gen. The Wii does not share the same audience as last gen, it has attracted a radical different audience (the "everyone else" crowd compared to 13-25 year-olds males of last gen). This means that the Xbox360 and PS3 are the "succesors" of last-gen, the Wii has nothing to do with that. Not that analysts or journalists will admit this. NPD has admitted a couple of times that during 2007-2008, the Wii was responsible of 99% of growth in the console market... 99%! This of course was completely ignored.



Growth within the industry was always contributed to the Xbox360 and PS3, all signs of decline were always put on the shoulders of the Wii. The truth is, long term number analysis says it's the other way around, big time.


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