The video game industry isn’t recession proof. Weaker than expected results in August and September confirmed that. Comments from NPD’s Michael Klotch at a game summit at SMU’s law school validated it further yesterday. But, with the official 2008, and December, results now tallied – there’s plenty for companies to be happy with. Growth hasn’t stopped, it’s simply slowed. It’s more measured, but monthly, and annually, the results are still trending positively for the industry (even as some individual companies struggle). One out four dollars spent on entertainment in the U.S. goes to gaming, NPD’s Klotch says.
Overall, the U.S. video game industry generated $21.33b in 2008, a number equal to 19% growth year over year. By segment, software sales were $10.96b, up 26%. Hardware sales climbed 11% to $7.81b. Accessories, buoyed by December sales, surged 14% to $2.57b.
Looking at the year broadly, Nintendo dominated, grabbing top honors in console sales, portable sales and the top four slots in the list of best selling software. Wii Play, Mario Kart, Wii Fit and Super Smash Bro. Brawl each sold in the range of four to five million units.
The year’s only other four million seller was the much hyped blockbuster Grand Theft Auto IV from Take Two, and that’s four million with a footnote. Four million is only reached when combining Xbox 360 and PS3 versions, than the game sold 5.18m, enough for number two overall on the year if titles were counted as single, cross-platform performers.
Missing from the year’s list was any rhythm game representative. That raises the question of whether sequelitis in Guitar Hero and Rock Band franchises is diluting their value. (This will be tested in March when Guitar Hero: Metallica finally debuts. Harmonix new Beatles-centric game, planned for late 2009 will also be an indicator).
Zooming in on December, the month’s sales were in line with the weaker economy and more modest overall. It total, sales for the industry were up 9% year over year to $5.29b. As is typically the case, December was far and away the big month of the year, contributing nearly a quarter of the year’s total performance.
Echoing a recurring theme, Nintendo had a banner month. Though the hardware segment was up only 2% overall, in total the Wii sold 2.15m units and the DS, defying those who’ve said it was due to fade with age, crossed beyond 3 million units (3.04m); a never before hit sales milestone.
Filling out the rest of the list, Microsoft snagged third with a solid 1.44m Xbox 360 units sold. Sony’s PSP moved a healthy 1.02m and the PS3, which is still struggling to make its mark despite impressive technological innards, sold 762k (up well year over year but still trailing the competition).
At the caboose station on the list, the PS2 brought up the rear with 410k units for the December period. While that was modest for a December month, it was more than enough to push the aging prior generation platform to a record of its own: more than 50m units sold lifetime in North America. The Wii may one day leapfrog past that but Sony’s earned bragging rights for reaching the plateau.
The console milestones nothwithstanding, narrowing in on the December data, the hot zone was unequivocally software. Nine out of the month’s top ten sellers pushed out more than 500k units, and number ten, Animal Crossing for the Wii, came up just a few thousand units short. Clearly, consumers were comfortable making smaller dollar value purchases leading up to the holiday period.
Nintendo’s game and peripheral bundles seemed especially popular. The extra controller matched with Wii Play drove it to first place. Wii Fit and Mario Kart finished third and fourth.
Call of Duty 3 from Activision proved AAA level franchises, as the company had predicted, would be a key draw. The title finished 2nd (Xbox 360) and 9th (PS3). Combined, its 1.86m units would have been enough for the months top slot.
Looking at software by distribution, Nintendo owned the monthly list with six of the top ten positions in their pocket (5 Wii, 1 DS). The Xbox 360 grabbed three and the PS3 –seeming to validate the correlation between software popularity and console demand – had only one. Among the third party publishers, Activision led with three positions (2 for Call of Duty). EA’s Left for Dead snagged one.
As is typical, all of the console manufactures remarked positively about their performance in the NPD data. Sony said they are “confident in [their momentum] into 2009” and emphasized impressive year over year unit sales gains. Microsoft toed its usual line, pointing out how well it was outselling the PS3. Nintendo didnt’ really need to say anything.
Here are the rest of the December (and the 2008 software and total) results, by the numbers:
THE DECEMBER NUMBERS
December Hardware Sales (in units sold) (November Result)
• Nintendo DS: 3.04m (1.57 million)
• Wii: 2.15m (2.04 million)
• Xbox 360: 1.44m (836,000)
• PlayStation Portable: 1.02m (421,000)
• PlayStation 3: 726k (378,000)
December Software Sales (Title, (Platform, Publisher) – Units)
1. Wii Play with Wii Remote (Wii, Nintendo) – 1.46 million
2. Call of Duty: World at War (360, Activision) – 1.33 million
3. Wii Fit (Wii, Nintendo) – 999,000
4. Mario Kart Wii (Wii, Nintendo) – 979,000
5. Guitar Hero World Tour (Wii, Activision) – 850,000
6. Gears of War 2 (360, Microsoft) – 745,000
7. Left 4 Dead (360, Electronic Arts) – 629,000
8. Mario Kart DS (DS, Nintendo) – 540,000
9. Call of Duty: World at War (PS3, Activision) – 533,000
10. Animal Crossing: City Folk (Wii, Nintendo) – 497,000
December, Overall Industry Totals (Total ( % Change Y/Y)(Last month’s total))
Video Games: $5.29b (9%)($2.91B)
Video Games Hardware: $1.88b (2%) ($1.21B )
Video Games Software: $2.75b (15%) ($1.45B )
Video Game Accessories: $662m(8%) ($255M)
2008 Annual Info:
Software Top Ten (Title, (Platform, Publisher) – Units)
1. Wii Play with Wii Remote (Wii, Nintendo) – 5.28 million
2. Mario Kart Wii (Wii, Nintendo) – 5 million
3. Wii Fit (Wii, Nintendo) – 4.53 million
4. Super Smash Bros. Brawl (Wii, Nintendo) – 4.17 million
5. Grand Theft Auto IV (360, Take-Two) – 3.29 million
6. Call of Duty: World at War (360, Activision) – 2.75 million
7. Gears of War 2 (360, Microsoft) – 2.31 million
8. Grand Theft Auto IV (PS3, Take-Two) – 1.89 million
9. Madden NFL 09 (360, Electronic Arts) – 1.87 million
10. Mario Kart DS (DS, Nintendo) – 1.65 million
2008 Overall Industry Totals (Total ( % Change Y/Y)
Video Games: $21.33b (19%)
Video Games Hardware: $7.81b (11%)
Video Games Software: $10.96b (26%)
Video Game Accessories: $2.57b (14%)
For comparative data, NPD’s data from each month for the past year can be found by clicking the names of the month as follows:
2008: •January •February •March •April •May •June•July•August•September•October •November
2007: •February•March•April•May•June•July•August •September•October •November •December
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