NPD: 2008 game sales reach $21 billion, Wii Play sells 5.28M

US retailers rack up another record year as Nintendo dominates hardware and software charts; Sony sees December system sales shrink.

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Last year was a wild one for the gaming industry. Despite a slumping economy, a rash of studio closures, and heavy layoffs at many major publishers, the actual business of gaming had never been better.

If sales equal quality, this is better than Halo 3.

The industry-tracking NPD Group backed up that assertion today with the release of its full 2008 sales figures, which show that US retailers raked in $21.33 billion in sales of gaming hardware, software, and accessories during the year (not including the PC market). That's up 19 percent from the nearly $18 billion brought in during 2007.

Although hardware sales were up 11 percent year-over-year to $7.81 billion, the big gains were made in software. Game software sales were up 26 percent over the course of 2008, totaling $10.96 billion.

Spearheading the charge was a quartet of Nintendo games for the Wii. In fact, the best-selling game of 2008 was actually released back in February of 2007, given that Wii Play (which comes bundled with a Wii Remote controller) sold 5.28 million copies. The remainder of the top five best sellers of 2008 included Mario Kart Wii (5 million), Wii Fit with Balance Board (4.53 million), the Wii fighter Super Smash Bros. Brawl (4.17 million), and Grand Theft Auto IV for the Xbox 360 (3.29 million).

For comparison, the best-seller of 2007, Microsoft's Halo 3 for the Xbox 360, topped the list with 4.82 million sold. Wii Play was the runner-up last year, with sales totaling 4.12 million.

Looking at just the December 2008 sales figures, the NPD Group data shows that the record-breaking year ended suitably strong. Game-industry sales were up 9 percent to $5.29 billion, driven primarily by $2.75 billion in software sales, a 15 percent year-over-year increase. Wii Play was the monthly champ, with 1.46 million sold during December. Other strong performers in the key holiday-sales month included Call of Duty: World at War for the Xbox 360 (1.33 million sold), Wii Fit (999,000 sold), and Mario Kart Wii (979,000 sold).

Hardware sales were up more modestly for the month, showing a 2 percent increase over December 2007 to finish at $1.88 billion. The Nintendo DS and Wii both posted banner months, with the portable notching 3.04 million sold (a new record for hardware) and the console trailing at 2.15 million. Both Nintendo systems sold significantly more last month than they had the previous December, as did Microsoft's Xbox 360 (which moved 1.44 million systems).

Those gains were partially offset by the performance of Sony's systems, all of which sold fewer units in December 2008 than in December 2007. The PlayStation Portable sold 1.02 million, down from the previous year's 1.06 million. The PlayStation 3 was also down slightly, selling 726,000 systems versus the prior December's 798,000. Although the current-generation systems were treading water, sales of the nine-year-old PlayStation 2 sank considerably, down to 410,000 from the previous December's 1.1 million.

Sony was quick to put a positive spin on the numbers, releasing a statement within a half hour of the NPD numbers going public. The electronics giant emphasized that PS3 sales for the year totaled 3.6 million, up 40 percent from 2007. Additionally, Sony said that full-year software sales for the PS3 were up 115 percent, though it gave no specific dollar amounts for either period.

NPD Group analyst Anita Frazier provided some additional perspective on the numbers, noting that the 2008 total of nearly $11 billion in software sales is more than the entire gaming industry brought in over the course of 2005. Additionally, Frazier responded to those who would say that the Guitar Hero and Rock Band franchises are losing steam by noting that December was their best month yet in terms of total dollar sales, with the pair representing 16 percent of all software revenue for the month.

Frazier also addressed the seemingly incongruous rash of layoffs and studio closures that have plagued the industry throughout 2008.

"We get asked a lot why there are so many layoffs and studio closings occurring in the industry when it has just realized another record-breaking year," Frazier said. "This is not a case of the rising tide lifting all boats. The increases are not being enjoyed equally by all manufacturers and publishers."

THE NPD GROUP'S 2008 US GAME INDUSTRY SALES

Category / Total / Change
Video Games: $21.33 billion +19%
Video Games Hardware: $7.81 billion +11%
Video Games Software: $10.96 billion +26%
Video Game Accessories: $2.57 billion +14%

Game Software (in units sold)
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

THE NPD GROUP'S DECEMBER 2008 US GAME INDUSTRY SALES

Category / Total / Change
Video Games: $5.29 billion +9%
Video Games Hardware: $1.88 billion +2%
Video Games Software: $2.75 billion +15%
Video Game Accessories: $662 million +8%

Hardware Sales (in units sold)
Nintendo DS: 3.04 million
Wii: 2.15 million
Xbox 360: 1.44 million
PlayStation 2: 410,000
PlayStation Portable: 1.02 million
PlayStation 3: 726,000

Game Software (in units sold)
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

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