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NPD: Behind the Numbers, December 2008
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NPD: Behind the Numbers, December 2008

January 19, 2009 Article Start Previous Page 3 of 5 Next

Software Dollar Sales

According to NPD figures, U.S. consumers spent $10.9 billion on software for consoles and handhelds in 2008, an increase of 26% from the previous year.

Sony has stated that $3.2 billion of software for PlayStation-branded systems was sold during the 2008. Moreover, Microsoft's figures suggest that around $2.7 billion was sold for its Xbox 360 during 2008.

Those figures therefore suggest that Nintendo sold around $4.8-$4.9 billion in software during 2008.

The numbers are consistent with Wii software having an average selling price between $40 and $50 and Nintendo DS software having an average selling price between $20 and $30. 

Here are Gamasutra's estimated game sales for each manufacturer, by dollar amount, for the entirity of 2008.

As in the previous chart, this includes both first and third-party game sales: 

Software Dollars 2008


Total Marketshare: Nintendo Wins

In January of 2008, a Nintendo press release claimed that Nintendo platforms were responsible for 60% of the industry's 43% growth rate from 2006 to 2007. Given that the industry had grown nearly $5.5 billion in that period, Nintendo was claiming about $3.3 billion year-on-year growth.

Last week Nintendo made a similar claim, and stated that it was responsible for 99% – or about $3.3 billion – of the industry's revenue growth in 2008. The claim about 2007 was remarkable, but to have produced 99% of the entire industry's growth the following year is just short of incredible.

Using data provided by Sony and Microsoft and Nintendo, we can begin to stitch together a full picture of just how the marketshare has changed from 2007 to 2008. The graphs tell the story, although the gory details are provided below.

First, here's the Gamasutra-compiled graph for the 2007 marketshare -- of the game hardware plus first and third party software plus first and third party accessories -- per platform owner.

(Remember that Nintendo's marketshare includes Wii, DS, and trace amounts of Game Boy Advance, Sony's includes PS2, PS3, and PSP, and Microsoft's includes Xbox 360 and trace amounts of Xbox):

Marketshare 2007

Next, here is the graph for the 2008 U.S. marketshare, so we can see some of the notable changes occurring thanks to Nintendo's blockbuster year:

Marketshare 2008

Here's the justification behind these numbers. According to Sony, its platforms accounted for $6.4 billion in all of 2008.

Moreover, for the January through November 2007 period, its platforms accounted for about $4.6 billion of industry revenue, with $1.5 billion more in hardware and software in December 2007. That makes for approximately $6.2 billion in revenue for 2007 after sales of accessories are factored in.

According to Microsoft, the Xbox 360 accounted for $4.8 billion in 2007, and after allowing for software sales for the original Xbox, we estimate it produced $5.1 billion in all of 2007.

Finally, using the known industry totals from 2007 and 2008 ($17.97 billion and $21.33 billion, respectively) we can estimate that Nintendo accounted for $6.7 billion in 2007 and Microsoft accounted for $4.9 billion in 2008.

The key observation here is that Microsoft's marketshare, both in dollars and in percentage, contracted marginally. While Sony's dollar share increased slightly, the total increase in the size of the industry actually resulted in a decrease in its percentage of the market.

All of that lost share, of course, has shifted to Nintendo's column, and the company now appears headed for a nearly 50% share of the market in terms of its own hardware and game sales, plus third parties selling merchandise for it.

Article Start Previous Page 3 of 5 Next

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