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NPD: Xbox 360 Overtakes PS3 As Industry Revenue Drops 8%

NPD: Xbox 360 Overtakes PS3 As Industry Revenue Drops 8%

December 10, 2009 | By Chris Remo

December 10, 2009 | By Chris Remo
More: Console/PC

The U.S. retail console game industry took an overall 7.6 percent year-over-year hit to $2.70 billion this November, analysis firm NPD announced, as software sales declined modestly and hardware revenues fell sharply over last year, in part thanks to widespread price cuts.

Software fell to $1.41 billion, down 3.1 percent from $1.45 billion -- a fairly minor decrease, particularly compared to last year's standout holiday season.

Hardware was down a more considerable 13.4 percent to $1.05 billion from $1.21 billion, as Xbox 360's 819,500 sales edged ahead of PlayStation 3's 710,400, beating its competitor for the first time in three months. Of course, both systems were significantly behind Wii and Nintendo DS, with 1.26 million and 1.70 million units sold respectively.

All told, NPD's Anita Frazier pointed out that month was still the industry's second-best November ever, after last year's. Frazier further emphasized how strong last year was overall, downplaying 2009's woes: "Year to date the industry is still up 7 percent over 2007," she wrote in an analyst note. "I think we all have to realize the incredible year that was 2008."

Hardware Sales

In addition to PS3 and Xbox 360's position swap, Nintendo's two systems changed places, giving the company's handheld system top honors with a considerable lead:

Nintendo DS: 1.70M
Wii: 1.26M
Xbox 360: 819.5K
PlayStation 3: 710.4K
PSP: 293.9K
PlayStation 2: 203.1K

Frazier also took the opportunity to contrast with the recent spate of pessimism about trends in Wii sales, saying the system is still selling extremely well for this point in its life cycle.

"While there has been a lot of focus on Wii sales as compared to last year, the system was still the best-selling console system by a margin of 54 percent," she wrote. "At this same point in the PS2 life cycle, the PS2 was down in unit sales by 23% over the previous year, but as history has shown, it continues to have a great deal of life left in it. So focusing on a comparison to Wii's stellar 2008 performance masks the reality of just how well this system is selling."

And SCEA president and CEO Jack Tretton spun the performance of his company's system, comparing it to last year: "In November, PS3 was the only hardware console to see any growth when compared to last November, experiencing an 88 percent lift," he said in a statement.

Software Sales

This month's software chart was dominated by Infinity Ward's Call of Duty: Modern Warfare 2, which held the top two chart slots with combined Xbox 360 and PlayStation 3 sales of over 6 million units, not counting sales of Microsoft's Xbox 360 console bundled. It is likely that that game alone accounted for over a quarter of industry software revenue this month.

That game's stellar performance still wasn't enough to offset 2009, Frazier pointed out. "While this year's top-selling item bested last year's by 283 percent, it couldn't make up for softness elsewhere," she wrote. "The top 50 games this year sold 5 percent less units than did the top 50 last year."

1. Call of Duty: Modern Warfare 2 (Infinity Ward, Activision), Xbox 360 - 4.20 million
2. Call of Duty: Modern Warfare 2 (Infinity Ward, Activision), PS3 - 1.87 million
3. New Super Mario Bros. Wii (Nintendo), Wii - 1.39 million
4. Assassin's Creed II (Ubisoft Montreal, Ubisoft), Xbox 360 - 794,700
5. Left 4 Dead 2 (Valve, Electronic Arts), Xbox 360 - 744,000
6. Wii Sports Resort (Nintendo), Wii - 720,200
7. Wii Fit Plus (Nintendo), Wii - 697,000
8. Assassin's Creed II (Ubisoft Montreal, Ubisoft), PS3 - 448,400
9. Dragon Age: Origins (BioWare, Electronic Arts), Xbox 360 - 362,100
10. Mario Kart Wii (Nintendo), Wii - 315,000

Ubisoft's Assassin's Creed II made its debut, selling 1.24 million units across Xbox 360 and PlayStation 3, while only the Xbox 360 version of BioWare's Dragon Age: Origins made the top ten, selling 362,100 units.

Nintendo was well represented on the chart, holding four of the top ten games, the most of any company on the chart.

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