Matt Matthews's Expert Blogs
During calendar 2014, Nintendo generated ¥27.1 billion from digital sales. At current exchange rates, that's over US$225 million, but the more important point is that this represents nearly 11% of the company's software revenue.
You've heard Nintendo's Iwata say it, and now GameStop's joining in: Don't drive game values to zero.
While Nintendo's retail business crumbles around them, their digital software sales have stalled.
At retail in January, Nintendo saw significant growth for its latest console and handheld in the UK. The Xbox One and PlayStation 4 collectively added £24 million in revenue, leading the market to a stunning 24 percent growth.
At its peak in 2008, Nintendo was shipping 26 million consoles and 30 million handhelds every 12 months. In calendar 2013, the company shipped a mere 4.3 million consoles and 13 million handhelds, declines of 80 and 60 percent, respectively.
Between September 2011 and September 2013, Nintendo's annualized digital revenue grew from ¥8 billion to ¥23 billion, an extremely rapid period of expansion. However, in the last two quarters, the company's digital business growth has stalled.
Final data are in for the UK retail software market. Microsoft continued to dominate for the year, but Sony's new PS4 has a strong lead over the Xbox One. The Wii U and PS Vita continue to languish while the 3DS stands as only growing handheld.
The popular Steam service from Valve Software, now in its second decade, has been undergoing growth at a rate of 25 percent every year. It has already surpassed the size of Xbox Live and will likely surpass Sony's service population by 2016.
We've now seen what a full year of Wii U sales look like in the U.S. What does history tell us about where the platform could be in five years?
UK software sales for the Xbox One and PlayStation 4 should surpass the Wii U's total sales within a couple of months, if their launches are any indication.
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