NPD: US game industry could hit $18B in '07

Analyst Anita Frazier points to booming August as evidence the GTAIV delay won't keep records from being broken.

Yesterday, the NPD Group reported that nearly 1 billion dollars of game software, hardware, and accessories were sold in the US in August. Year to date, combined US non-PC sales for 2007 totaled $8.02 billion, up $2.42 billion from $5.6 billion during the same period in 2006. The year's first eight months saw consumers in the 50 states buy $3.1 billion in hardware, $3.8 billion in software, and $1.1 billion in accessories.

The August NPD report beat analysts' expectations, and made many optimistic about the forthcoming holiday season. No one is more upbeat than NPD's own Anita Frazier, who believes that despite several high-profile delays such as Grand Theft Auto IV, 2007 will still be one for the record books.

"The industry is up by nearly 50 percent," she told GameSpot. "The back part of the year would have to fall apart to not have a record-breaking year. I think we'll end in the range of $16 to $18 billion in the US."

Frazier also weighed in on several ongoing trends and forthcoming releases. She predicts no real relief from the ongoing shortage of Wii consoles until next year. "Very simply, demand is still meeting or exceeding supply," she said. "I think we'll see this situation continue through the holidays, and we may see some balancing starting February 2008."

NPD's top game analyst also thinks that the forthcoming clash between rhythm games Rock Band and Guitar Hero III: Legends of Rock won't be much of a clash at all. "The rock music premise of both...is an experience with such broad appeal, I think they can coexist in the market nicely," Frazier surmised.

Last but not least, Frazier agrees with the widespread sentiment that game publishers are hurting themselves by jam-packing the holiday season with releases. "If a title is big enough and buzz is strong, it will sell any time of the year," she asserted. "There is no need for strong titles to rely on Q4. Some less strong titles may want to ride the wave of retail dollars that flow in particularly in November and December, and that is a legitimate marketing tactic. But strong titles should not fear other release windows, and it can be very beneficial to have some breathing room."

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Discussion

98 comments
wars45
wars45

just gose to show games make moor money than movies now

123625
123625

thats alot of money

foxracing1313
foxracing1313

this Frazier chick has the easiest job ever .... jkocher: How was that a misuse of economic terms? All she is implying is that at the going market price (say for the nintendo wii) the quantity demanded is greater than the quantity supplied. Unless you meant something else, if so explain.

NandoSupes
NandoSupes

video games are as relevant as movies or more. 10 years ago this was not the case,but the video game industry as evolve as a art form, and people are starting to recognise this. next year the revenues will be even higher ,I love videogaming is just an art form to me, and Sony,Microsoft and Nintendo are showing how the industry has evolve to where it stands today honorable mention to Sega and Atari as well.

jkocher
jkocher

"Very simply, demand is still meeting or exceeding supply," Nice misuse of economic terms =D

blbell23
blbell23

@ kingtrewq In case YOU didn't notice, just because an individual rating has to be in .5 increments does NOT mean that the average rating is. I'm sure Halo 3 is pretty much a lock to be a 9.6 to 9.9 with all the hype behind it. I'm not a big fan, but that's just me.

kingtrewq
kingtrewq

lots of good games are coming out at the end and these numbers are gonna grow hugely @ Toyeboy gamespots ratings now are in .5 increments if you didnt notice

Bond_Savingsbon
Bond_Savingsbon

Frazier forgot to take into account that there are some games that have good production value and alot of Buzz but just fall flat in the sales. Viva Pinata would be one example I can think of.

bigpimppapa
bigpimppapa

That just goes to show all of us that we are paying way to much money for there hardware as well as software.

teknicz
teknicz

Maybe the video game companies are doing us a favor. Their awkward reluctance to release games in the Summer means that we have to get out of our rooms and face...sunlight.

Jedilink109
Jedilink109

Yeah I hate it that everything seems to come out later in the year. And why does summer seem to always be a big dry patch when summer is a much bigger season for movies? I tend to get bored waiting for those high profile games because nothing is coming out until November or October or something. It's just kind of annoying. At least balance it out a bit more throughout the year is all I'm saying. :P

solo4321
solo4321

halo 3 halo 3 halo 3 halo 3halo 3halo3halo3halo3halo3halo3halo3

Toyeboy
Toyeboy

halo 3 is one of the reasons for the hike in august, everyone is buying the 360 just for halo 3 b/c it's Halo, and I think it's going to be a HUGE hit just like halo 1 and 2...9.6 to 9.9 on GS probably.

jooohnnny
jooohnnny

Soon gaming will surpass Hollywood in 10 -15 years when programing and the tec can deliver the kinds of games we all really want and not just dream about the ones we would like to play. Instead give us games we didnt dream was possible. But reality is different so heres to hoping!

MichaeltheCM
MichaeltheCM

$18 Billion!?!??! thats an insane amount of money!

HAVOK1991
HAVOK1991

Atheist_Jew You do know the problem with Hollywood is not how much money they put into production its the huge sums of money they pay A list actors to play in the movies. The analogy you really can find with video games which is voice actors. More money in the industry=More money for the production of games More money for the production=Equals higher pay for those producing Higher Pay=Better People are hired with higher incentive Better People developing=Better Games Simple enough then. Capitalism is the only reason the industry is going so well, heavy regulation could kill it. Or maybe go to North Korea and see how many good of games they have.

ninten5
ninten5

I bet you next year it would drop back down to 15B cuz the hype for newer consoles would drop, ps2 would be dead, the big hitters would be out and most would have bought it by then

merch
merch

pc gaming is struggling the most u can dl the games for free and run mmos on private servers lol and pc must upgrade every 2-3 years to run good games

Humorguy_basic
Humorguy_basic

To those that gave a negative - when have you ever seen bad news? Why do you think PC gaming is never mentioned? Could it be that PC gaming is struggling the most out of the formats and that's why? All the complaints about large publishers and crappy or buggy games and all the negatives that get thrown about regarding video gaming and nothing ever changes because the publishers always know they have the fanboys/girls. Look below and in most threads and you'll see what I mean. Oh and I expect another -6 or so score on this message too. truth is hard to take.

osxgp
osxgp

I'm sure Rockband will sell, but like RaNaBiR said the price of the peripherals will decide it's fate. It is developed by the people who made Guitar Hero 1 & 2, so it's hard to say.

RaNaBiR
RaNaBiR

Still, I don't know whether Rock Band will outsell GH3. I guess it all depends on the peripheral pricing for RB.

fax555241
fax555241

[This message was deleted at the request of the original poster]

fax555241
fax555241

[This message was deleted at the request of the original poster]

legendaryhalo_3
legendaryhalo_3

nice, hopefully october 360 sales will eclipse 350k with the 3 comeing. Great news for gamers

ColdfireTrilogy
ColdfireTrilogy

I can believe it, Gaming is the next wave in entertainment. People have known it for years, just most didn't want to believe it. This is good news for us. I remember years back when we were the geeks and losers because we loved Galaga and didnt blow at it. Ahhhh well someday my friends someday ...

hector1313
hector1313

I don't think everyone in the world likes premises for games being milked a la Halo, digi dragon, so I doubt it.

digi_dragon324
digi_dragon324

good good good good, i just hope everyone in the world buys halo 3.

Humorguy_basic
Humorguy_basic

Let's not forget folks, that this 50 percent increase is all about the Wii and DS mostly. PC gaming slightly down. PS2 slightly up, PS3 flat from a low base, 360 slightly up. NPD and the gaming media will always put a positive spin on the numbers. I.e. Wii gaming up 200%, PC gaming down 100% and NPD would not have a headline saying 'PC gaming dead' - it would say 'gaming up 100%'! Remember that when you see these positive reports every single quarter!

CrushedGroove
CrushedGroove

Gamers have been saying for years that the holiday season is ridiculously overloaded, and during the summer, we are left twiddling our thumbs. God of War II, Forza, Bioshock, Super Paper Mario, and Heavenly Sword have all done very well this year. I do not understand why the publishers have such a lack of confidence in their games to sell at any other time during the year. Hopefully, a few companies are reading all of our comments and take them to heart.

BlueBirdTS
BlueBirdTS

I have to agree with Frazier's last statement. I'm glad that GTA IV was delayed, otherwise all the other Q4 games would have had lousy sales. I'm also glad that Bioshock was released in August and not later.

dev_ron
dev_ron

I’ve contributed 400$ + in this year :D don’t thank me yet US, cos I’ve more to give, Just keep those good games coming :)

carddude
carddude

Well this isn't gonna be hard to increase once rock band comes out. I think people will have to look deep in their souls to spend the total $250 or so for one game. Not saying that the game dosen't look awesome, Its just Its gonna cost a ton for the full set of equipment for the game.

fax555241
fax555241

[This message was deleted at the request of the original poster]

fax555241
fax555241

[This message was deleted at the request of the original poster]

thekey
thekey

Lee_Stricklin "I remember when people used to laugh at me for "wasting" my time playing videogames. With videogames making a hell of a lot more money than movies I think it's safe to say I should be the one laughing." Man I know I've been playing games since they were cool.

Jd1680a
Jd1680a

what about PC game sales? Why isnt there no mention at all about how well PC games are selling on these reports? Is it so hard to add another sentence on to these reports about PC games?

PacoL250
PacoL250

So imagine if GTA IV was included this holiday season... Regardless, I agree wholeheartedly with Frazier's sentiment about the jam-packed holiday season. If a game is big enough, it will sell. Not to mention if the marketing is strong enough, it will sell. Case in point: Star Wars: Knights of the Old Republic. If I remember correctly, the game came out in the summer and still did very well. Also, if game publishers/developers of bigger titles released them in say the summer, it would make it easier on consumers pockets. One could buy a big title in the summer and still be able to get another one they may want during the holidays. Cramming them into the holidays makes it hard to choose if one is limited because of monetary reasons. We all know that people don't buy just games during the holidays.

robbie_basic
robbie_basic

I agree with the last paragraph. Games releasing during Q4 is stupid. That's when I'm all busy with classes and have no time. Hell lets just move Christmas to summer and fix everything.

Pete5506
Pete5506

Wow thats a alot of money, but I bet they will get more than that

endtype
endtype

this is a good sign for the future of games...

Kieran_Y
Kieran_Y

"I remember when people used to laugh at me for "wasting" my time playing videogames. With videogames making a hell of a lot more money than movies I think it's safe to say I should be the one laughing." No, you should be still laughed at. Do you make money while playing video games? No. You could've been making money, exercising, socializing, etc.