NPD: June game sales up 12 percent

Analysts begin to react to stronger-than-expected revenues, driven by best-sellers Spider-Man 2, Full Spectrum Warrior, Red Dead Revolver, and Harry Potter and the Prisoner of Azkaban.

June 2004 NPD Funworld figures arrived to the industry a day late this month, but there were no complaints from either the retailer or publisher camps. Dollar and unit sales were up for the month of June, prompting one analyst to call the $41 million spike in June sales “significantly higher than expected.”

Wedbush Morgan analyst Michael Pachter was the first to issue a note to the financial community reflecting on the increased revenues for the month of June, which rose from $339 million in June 2003 to $380 million in June 2004.

Drilling down to highlight the industry’s top performers, Pachter said, “We were especially encouraged by the performance of new SKUs, such as Activision's Spider-Man 2, Atari's Driver 3, Electronic Arts' Harry Potter and the Prisoner of Azkaban, and THQ's Full Spectrum Warrior, each of which sold well over 100,000 units.” Those were just four of the 12 titles that sold more than 100,000 units each during the month.

Other notable sellers, according to Pachter, were Activision’s A-list titles Shrek 2 and Spider-Man 2, which sold 326,000 units and 442,000 units, respectively, He also singled out Atari’s respectable performance with Driver 3, which sold 238,000 units despite receiving mixed reviews.

Electronic Arts was also in the spotlight during June, during which it held onto its 16 percent share of the game market. The company drove an estimated $61.4 million at retail, buoyed by Harry Potter and the Prisoner of Azkaban's 316,000 units sold.

Other 100,000-plus-unit sellers for the month included Midway’s NBA Ballers (120,000) and Take-Two’s Red Dead Revolver (140,000 units).

Pachter held up THQ for some well-deserved glory, noting the company had 29 titles that sold in excess of 10,000 units during the month of June, compared to only 10 titles that topped the threshold the previous month. Full Spectrum Warrior for the Xbox sold about 190,000 units for the month.

Breaking sales out by console, Xbox showed a dramatic spike in year-on-year game sales. Xbox software sales in June 2004 were up 69 percent over June 2003 figures. GameCube software sales were up 48 percent. Sales of PS2 games were up 3 percent and sales of GBA games were up 6 percent.

With the first half of 2004 over, Pachter was confident in his assessment that the game market is on track for a year-on-year growth of at least 10 percent. His closing comments to the investment community were emblematic of this enthusiasm--“The rebound in sales growth has begun.”

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