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NPD: Behind the Numbers, June 2010
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NPD: Behind the Numbers, June 2010

July 19, 2010 Article Start Page 1 of 4 Next

[Gamasutra analyst Matt Matthews takes a look inside June's somewhat unusual NPD U.S. console retail results -- strong hardware puts all eyes on the Big Three platform holders, but why can't software keep up?]

Despite earlier hopes that the videogame industry would record a modest gain, the June 2010 U.S. console retail figures reported by the NPD Group last week showed that revenue was down 6 percent over last year. Unlike May, however, the hardware segment actually showed growth in June while the software segment declined by 15 percent. 

In our examination of the details behind these figures, we'll take a long look at strong Xbox 360 sales as Microsoft launches its retooled S-model and discuss how software sales did not keep pace with hardware.

Next we'll turn our attention to first-party/third-party software sales on the Wii and demonstrate that Nintendo's hardware sales are quite strong now despite a temporary slowdown in the first quarter.

Just the Numbers

Before we begin, it's instructive to ground ourselves in the top line figures. As noted above, the overall industry saw fall in monthly revenue of nearly 6%, from $1.17 billion down to $1.10 billion.

Most of the year-over-year decline came from diminished software sales, which came in at $531 million including both console and handheld software, over $95 million below last June's figure. This was driven by a 14.7% decline in software unit sales and a 0.5% decline in the average price of software sold in June.

Strong sales of all three current-generation consoles (Nintendo Wii, Microsoft Xbox 360, and Sony PlayStation 3) pushed hardware revenue to a 5% increase year-over-year. Not only did the number of systems increase modestly, but those systems sold for a slightly higher price, up to $214 from $206 in June 2009.

Year-to-date the industry is down 9.4% in total revenue with the hardware segment being the greatest contributor to the loss. Software has fared better with average prices up by nearly 3%, year-to-date. However a 10% decline in units sold accounts for overall decline in total software revenue in 2010.

These figures refer only to retail sales estimates and therefore do not include other sources of revenue from subscriptions, downloadable console games (e.g. through Xbox Live or the PlayStation Network), or in-game content purchased through online services.

This other content and service may be purchased directly through debit or credit card transactions or through services like PayPal. Accurate data on these services is generally available to a limited number of parties, and therefore a comprehensive measurement of overall industry revenue remains elusive.

Article Start Page 1 of 4 Next

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