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U.S. September Video Game Sales Up 38%

U.S. September Video Game Sales Up 38%

October 13, 2006 | By David Jenkins

October 13, 2006 | By David Jenkins
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Reports from research firm NPD Group show that video game sales in the U.S. for September rose by 38 percent compared to the same period last year, with the market buoyed further by DS success and overall game sales growth.

Software sales rose by 29 percent to $446 million, with sales of accessories up 21 percent to $88 million. The best selling game of the month was Xbox 360 exclusive Saints Row, followed by Lego Star Wars II and Pokemon Mystery Dungeon.

Total video game sales for the month rose from $563 million last year to a new record of $777 million. Hardware sales rose as much as 71 percent to $244 million, with the Nintendo DS selling more than 400,000 units alone and bringing its U.S. total to 6.3 million - around 1 million more than the PSP.

Also during September, the Xbox 360 once again failed to beat the PlayStation 2 with around 260,000 unit sales versus 305,000. It was not all good news for Sony, though, with the PSP pushed back to an embarrassing fifth place with just over 150,000 sales - behind the Game Boy Advance family of consoles at around 175,000.

[UPDATE] - analyst firm Wedbush Morgan has released plenty more detail relating to its previous NPD predictions and the actual results - read on for the specifics and some compelling analysis.

The company explains of the 29% boost: "The upside reflects higher than expected sales of both current and next generation software. Current generation software sales declined $44 million (14%), $16 million better than we expected. Next generation software sales increased by $143 million, $13 million better than our estimate."

It continues: "Year-to-date software sales (including PC) are up almost 6% compared to last year, tracking above our 4% full-year growth forecast, and we see no signs that growth will slow over the next three months. We expect double-digit growth over the next six months, as year-over-year comparisons are favorable through March. We now believe that full-year growth could exceed 7%, compared to publisher guidance of flat to negative 5%."

Further stats follow: "The average selling price of all games (console and handheld, current and next generation) in September was $32.49, 1% higher than last September's $32.14 ASP, with lower pricing on current generation and catalog software offset by higher pricing on next generation software. Unit sales were up 27%."

It's also revealed: "There were 15 games selling more than 100,000 units apiece in September vs. our estimate of 10 and compared to 7 last September. The top 10 games captured 27% of dollar sales and 19% in unit sales in September versus 37% and 23% last month, reflecting another month of strong sales for newly released games."

Impressive Xbox 360 purchase rises were also seen: "We had expected next generation (360, PSP, DS) software sales to total $168 million, so the $182 million sales figure was higher than our forecast. In particular, sales of Xbox 360 software were better than we expected, increasing to $104 million from $89 million in August. We had expected Xbox 360 software sales to contribute $50 - 70 million per month until October (when a strong lineup is scheduled for release), and the strength over the past four months suggests to us that contribution may continue at the $100 million level in October, with significantly higher sales in
November and December."

One of the most interesting parts of the survey, too, relates to Xbox 360 hardware boosts: "Through September, NPD data shows that Xbox 360 hardware sales in the U.S. were 2.7 million units, and sales in September were in line with our 250,000 units estimate. We expect Microsoft to sell approximately 400,000 hardware units in October, between 750,000 - 1 million units in November, and between 1.5 - 2 million units December. Sell through of Xbox 360 hardware could be higher if the supply situation for the PS3 falls well short of demand, with many holiday gift givers likely substituting purchases of the 360 in place of the PS3."

Finally, the lack of decline on current-gen software is explained intriguingly: "We believe that the reversal is attributable to a combination of continuing strong demand for PS2 hardware, as well as consumer acceptance that the PS3 and the Wii will be almost impossible to purchase this holiday. It appears that the recent sales strength on current generation platforms is sustainable, given strong sell-through performance over the last several months. Consumers appear willing to purchase compelling content for current generation consoles in spite of the imminent launches of the PS3 and Wii, and have embraced software for the DS and PSP, driving monthly sales higher. Accordingly, we expect to see more modest declines in current generation software sales over the next six months."


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