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NPD: Behind the Numbers, March 2009
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NPD: Behind the Numbers, March 2009


April 18, 2009 Article Start Previous Page 5 of 5
 

Software Units and Dollars

Software sales in March 2009 dropped relative to both the prior year and the previous month. Data from the NPD Group shows that year-to-date software dollar sales were up by 9.5% as of the end of February.

Moreover, comments made by Mr. Pachter of Wedbush Morgan revealed that unit sales were up year-on-year in both January and February of 2009.

Despite these gains, year-to-date software revenue was down 1.7% year-on-year by the end of March 2009 on a nearly 1% drop in year-to-date software unit sales.

The larger drop in revenue indicates that average sale prices of software were down in 2009, possibly on lower sales of big ticket items like Guitar Hero and Rock Band bundles.

As noted in her comments with the data release to the media, NPD analyst Anita Frazier suggested that the Easter holiday may have had some impact on sales. Whereas Easter fell in March during 2008, it was held during April in 2009 and thus any holiday-related shopping bump will be shown when April's data is published.

1Q Software Units, 2008 and 2009

We are not completely convinced of this explanation. The release of Super Smash Bros. Brawl during March 2008 seems a more salient data point. That game alone accounted for 2.7 million software unit sales and $120 million dollars during March of last year.

For two platforms we have additional software sales data: the Xbox 360 and the Nintendo Wii.

Microsoft had $220 million in third-party software sales last year during March 2008. In March 2009, its third-party software sales were only $185 million, a drop of 16%.

This is in line with the drop in all software collectively. Combined with what one presumes are stronger first-party software sales for the month (on the back of Halo Wars and Halo 3, both in the top 20) it seems natural to conclude that Microsoft's software sales overall were up year-on-year.

Moreover, Wedbush Morgan's Mr. Pachter commented that, taking the difference of Wii Fit and Super Smash Bros. Brawl sales into account, it appears that Wii software sales were flat year-on-year. This is particularly striking because, as he notes, the system's installed base has more than doubled in the last 12 months.

[As always, many thanks to the NPD Group for its monthly release of the videogame industry data. Additional credit is due to Mr. Michael Pachter, analyst for Wedbush Morgan Securities, for his industry analysis. Moreover, thanks to my colleagues at Gamasutra and on NeoGAF for many helpful discussions.]


Article Start Previous Page 5 of 5

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