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NPD: Behind the Numbers, August 2009
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NPD: Behind the Numbers, August 2009

September 14, 2009 Article Start Page 1 of 5 Next

Last Thursday, the NPD Group released its latest estimates for retail videogame sales in the United States during the month of August 2009. As predicted by many analysts, sales were down again compared to August of 2008, but there were signs that the industry could have passed an inflection point – or even a local minimum – and was headed for growth again in September.

This month we'll focus on several key areas. We'll look at pricing of console hardware, specifically Sony's PlayStation 3 and where Microsoft and Nintendo go from here. Madden NFL 10 sales were below expectations, and we'll examine the retail prospects for Activision's port of Call of Duty 4 for the Wii.

Finally we'll explain how the industry is likely to miss $20 billion in revenue for the year – down from the high of $21.3 billion in 2008 – and add some comments on the outlook for the rest of the year.

Industry at a Glance

Industry revenue for August 2009 dropped $176 million dollars compared to the same month in 2008, a decrease of 17%. While the figures are scary, they're actually an improvement from July when year-over-year industry revenue dropped a staggering $340 million – or 29% – from the figures for July 2008.

To the extent that the loss was smaller, both in absolute and relative terms, the industry fared better in August than it did in July. These readings are the basis for much of the turnaround speculation surrounding September's sales.

August 2009 At a Glance

One segment of the industry, accessories, actually demonstrated growth over 2008. All other segments were down, with the hardware segment particularly hard hit with revenue down almost $100 million for the month.

Software was down 15%, or about $80 million, in August. At least a quarter of that differential, or $20 million, could be theoretically attributed to disappointing sales of the month's big software release, Madden NFL 10.

We again offer the caveat that the NPD Group's figures cited here only include retail sales and do not include sales of software and content offered through the online storefronts on each current generation console and some handhelds.

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