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Opinion: NPD Sales Reporting Restrictions May Shoot Data Service In The Foot

Opinion: NPD Sales Reporting Restrictions May Shoot Data Service In The Foot

March 28, 2011 | By Chris Morris

I get why The NPD Group has been clamping down on distribution of its data recently. I really do.

But I'm starting to worry that as the company keeps an eye on its bottom line, it could be undercutting its own relevancy at a time when it's already under assault.

Let's back up a little: Last October, NPD sent a note to media outlets noting it was changing the format of its monthly U.S. video game retail sales report, eliminating both regular hardware unit sales figures and unit sales numbers for individual software titles. Reporters squawked, but NPD cut off the debate by saying the revised publishing guidelines weren't open for debate.

After some grumbling, everyone moved on. (A far cry, by the way, from the 2007 brouhaha that erupted when the company attempted to stop listing hardware sales. That action was reversed six days later due to the backlash.)

Monday, the company tightened the belt another notch, asking analysts to no longer release data to the media -- whether by email reports, in interviews or any other methods.

The reasoning is pretty basic: NPD charges subscribers tens of thousands of dollars for its reports. And as more data is public, it's harder for the company to justify that cost.

Look, it's their proprietary data -- and they absolutely have the right to do whatever they want with it. But by so severely restricting the information the media receives, the company has effectively removed a layer of transparency into the industry. And that's the most troubling part of this whole debate.

NPD insists this is not a move to block the media.

"We have heard from our clients and retail partners that NPD information is increasingly out in the public domain without proper attribution, incorrect context and in other ways that is not in the best interest of our clients or the industry," the company said in a statement. "It is our responsibility and right to manage the usage of that information. We are not freezing out the media as it has been portrayed. Instead, we are looking to work even more directly with the media than we already do to ensure our information and insights are used responsibly. "

For what it's worth, I believe that. NPD is approachable and responsive on day-to-day requests -- but the rush to get the monthly numbers up by most outlets, along with the lack of hard numbers in NPD's own report, opens the door for trouble. Analyst notes generally offered a reliable insight into the overall picture of the industry's health. Without those, speculation will fill the void.

To be clear, not receiving a monthly note from Michael Pachter (or other analysts) with details of the sales report will be an inconvenience, but if NPD believes this will result in the information not making it out, it's in for a rude surprise. Too many other sources in the industry get the data and are happy to release it anonymously. But without accountability, there's nothing to stop them from goosing the numbers -- and many outlets could be fooled into over-reporting or under-reporting sales figures.

Perhaps more importantly, the monthly spin notes sent out by Microsoft, Nintendo and Sony boasting about their sales (while eschewing any hard numbers) will likely become even more hyperbolic, as there will be no indisputable way to call them on the carpet.

All of this comes about as NPD is fighting a reputation battle with one of the industry's biggest publishers. Electronic Arts has been on the offensive for the past month, with a spokesperson saying the company's data is "a misrepresentation of the entire industry".

The company has responded to those criticisms with plans to deliver data on digital sales on a monthly basis, though it hasn't yet announced how much of that will be made publicly available.

NPD is, without doubt, considered the definitive source on retail video game sales data in the U.S. Other groups who attempt to gather it have, so far, fallen short. But as the flow of regular public information is increasingly restricted, that opens up an opportunity for a competing service to rise to prominence.

Some smart people run NPD -- and no one, not even the most curmudgeonly of the game journalism crew, begrudges them the opportunity to be paid for the data they provide. But by layering new roadblocks and restrictions onto their most closely followed report, the company is making it harder for both fans and potential investors to get an accurate picture of the industry's trajectory.

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