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NPD: August game-software revenue up 17.5 percent

By Tor Thorsen, GameSpotPosted Sep 8, 2006 6:36 am PT

Madden-mania helps console games ring up $397 million; hardware spikes 22 percent, thanks to an ascendant DS, but current-gen consoles plummet.

Wasn't 2006 supposed to be a year of doom and gloom for the game industry? As revelers were popping their champagne corks in the early hours of January 1, many analysts were predicting the following 12 months would be a long slog through a gloomy console-transition year.

However, after a few skittish months, things began to look up in April, which saw overall game sales--software, hardware, and accessories--rise 16 percent, according to the industry-research firm NPD Group. That number fell in May by 10 percent but rebounded in June by 25 percent. The upward trend accelerated in July, which saw combined sales climb 29 percent when compared to the same month in 2005.

Today, preliminary percentages from NPD's August report began to trickle out--and they also brought good news. NPD reported that non-PC game software sales rang up $397 million in August, a rise of 17.5 percent versus the year before. What analysts term "current-generation" software--games for the PlayStation 2, Xbox, GameCube, and Game Boy Advance--accounted for $249 million. So-called "next-generation" software--DS, PlayStation Portable, and Xbox 360 games--earned $148 million.

August's main moneymaker in console games was Madden NFL 07, which helped Electronic Arts' sales rise five percent during the month. The game sold nearly two million units during its first week, enjoying the benefits of having no competition from rival football franchises. That translated to a $100 million one-week tally, a record for the franchise. Analysts also singled out Square Enix's Dirge of Cerberus: Final Fantasy VII (PlayStation 2), and Capcom's Dead Rising (Xbox 360) as best-sellers for the month. NPD's estimate did not include sales of THQ's Saints Row (Xbox 360), which has topped charts since its August 29 release.

By platform, the biggest software driver was a little thing called the Nintendo DS. Sales of games for Nintendo's dual-screen handheld rose 116 percent during the month, propelled by the continuing Brain Training and Mario Kart DS crazes. Sales of titles for the DS's archrival, Sony's PlayStation Portable, also saw an increase of 57 percent, while Nintendo's previous handheld saw its software dollars drop 27 percent.

But while things were rosy down handheld way, over in consoletown, year-on-year software sales fell almost all around. The sole winner was the PlayStation 2, which saw game sales climb a meager one percent. Meanwhile, GameCube game sales dropped 23 percent and Xbox game sales fell 53 percent.

So why did software sales spike then? Keep in mind there are no year-on-year comparisons for the Xbox 360, which went on sale in November 2005. However, the early NPD report did offer some insight into the console's fortunes. Some $89 million of 360 games were sold in August, beating analyst expectations (again).

During the month, around 205,000 Xbox 360s were sold, a slip of one percent compared to July. So far in 2006, the console has sold some 2.4 million units, according to NPD. Wedbush Morgan analyst Michael Pachter expects the console to sell between 950,000 to 1.5 million more units through the end of the year, putting its 2006 total between 3.35 and 3.9 million units.

As for the other hardware platforms, once again it was a DS success story. Units of Nintendo's handheld enjoyed a whopping 168 percent year-on-year growth spurt during the month, outpacing the only other gainer, the PlayStation 2, which saw a rise of just three percent. Everywhere else, it was a veritable bloodbath. Sales of PSPs dropped 12 percent, GBAs slid 23 percent, GameCubes fell 23 percent, and Xboxes plummeted 93 percent, the last platform's sales no doubt cannibalized by its next-gen sibling.

104 Comments

  • Humorguy_basic

    Posted Sep 16, 2006 8:45 am PT

    From all that is being said below. it would seem most agree that video gaming is not as positive as the media tries to make us think, that sales are not as good as the media are trying to brainwash us of and that things need to change or this Xmas will be as bad, if not worse than the last two Xmas's. One more bad Xmas season and video gaming could go into freefall. Just like the movie business couldn't survive with two blockbusters a year and the rest crap, the gaming market cannot live on two 90% games a year and the rest 75% or below. And that is what's happening now.

  • mrnickyb

    Posted Sep 14, 2006 7:59 pm PT

    The comment at the end of the article about original X-Box sales plummeting 93 percent due to the 360 is totally incorrect. The X-Box is down 93 percent because it is no longer in production and is almost impossible to find. I would love to pick up a new X-Box considering how awful the backwards compatibility is on the 360. I have a large X-Box library and if anything happens to my one working console than I will be using the discs as coasters in two or three years.

  • spoo_

    Posted Sep 11, 2006 6:41 am PT

    godovivel please stop making a fool of yourself... US is not the only part of NA...

    The #'s are right but you also need to take a few things in consideration with the NPD #s. For some reason they don't count online sales and they don't count anyone besides AMERICA. If you want to find the worldwide #s go to:

    http://forum.pcvsconsole.com/folder.php?fid=23

    Kids if you want to sound smart you need to pay attention in school, in this case geography class... Geever, I'm sorry but you wrong here are the numbers through June 30, 2006:
    Xbox 360 Hardware North America - 3.3 million
    Europe - 1.3 million
    Other - 0.4 million
    Worldwide - 5 million

    I'm not sure if they are how many shipped or sold but it doesn't mater because by now MS has sold over 5 million 360 units worldwide. I don't pull numbers and facts out of my ass like other posters here.

  • GeeverTidus

    Posted Sep 10, 2006 10:22 pm PT

    2.4 million xbox360 sold in NA...thats too low... and for the guyz who said that there were 5 million xbox360 shipped worldwide...hahaha think again it says just "shipped" not "SOLD" out... its really hard to accept for xbaxfans that in Asia and Europe their fav console flopped...a lot of xbox360 in japan and in major asian countries stuck-up in shelves... and even if they lower its price in the holidays still it wont attrack asians primarily because it doesn't cater the kind of games asians want... Xbox360 will never win the hearts of asians and that would clearly mean asian game publishers will develop more exclusive titles for PS3 and Wii because they will solely own the big market share here...this would only mean that either PS3 or Wii will lead the nextgen console war certainly because these 2 consoles can penetrate the worlwide gaming markets, unlike xbox360 who is having a very hard time pushing their console in asian gaming market....and remeber guyz fanbase alone will boost it sales, PLAYSTATION and NINTENDO has milliions of fans worldwide unlike xbox360 whose fanbase is just in NA and a little percent in EU:-)

  • GeeverTidus

    Posted Sep 10, 2006 10:14 pm PT

    2.4 million xbox360 sod in NA...thats too low... and for the guyz who said that there were 5 million xbox360 shipped worldwide...hahaha think again it says just "shipped" not "SOLD" out... its really hard to accept for xbaxfans that in Asia and Europe their fav console flopped...a lot of xbox360 in japan and in major asian countries stuck-up in shelves... and even if they lower its price in the holidays still it wont attrack asians primarily because it doesn't cater the kind of games asians want... Xbox360 will never win the hearts of asians and that would clearly mean asian game publishers will develop more exclusive titles for PS3 and Wii because they will solely own the big market share here...this would only mean that either PS3 or Wii will lead the nextgen console war certainly because these 2 consoles can penetrate the worlwide gaming markets, unlike xbox360 who is having a very hard time pushing their console in asian gaming market....and remeber guyz fanbase alone will boost it sales, PLAYSTATION and NINTENDO has milliions of fans worldwide unlike xbox360 whose fanbase is just in NA and a little percent in EU:-)

  • Sonic2batt

    Posted Sep 10, 2006 3:05 pm PT

    "meimnobody
    Only reason PS2s are being bought is to replace broken ones. People have built up ps2 gaming collections by whatever means and so they need the console since they never got a warranty or it was only for a year or two. Nintendo consoles on the hand for all intents and purposes never break."

    OMG, maybe you're on to something! Sony starts off each generation selling at a loss. But then the systems get popular and later break, so you'll have a situation like the PS2 now where people are buying replacements at a point where Sony is now making profit off the hardware! PStwo probably costs $50 to make now. So now you have people who bought 2 PS2's , that increases the installed base, they've already made profits off of all the games and accessories you've bought, and now they're getting the money they lost selling you your first PS2. LOL now look at the PS3 it will launch for $600 and they will SLOWLY lower the cost to the point where they're making 100% profit or more off the hardware.

  • wenbin09

    Posted Sep 10, 2006 10:31 am PT

    Bring us more next gen games!!!

  • soulknight63133

    Posted Sep 10, 2006 6:24 am PT

    And please, don't flame a company for making sale projections. They ALL do it and they ALL have met AND failed on their projections in the past at one point or another. MS, Sony , and Nintendo all made some bold statements and had to digress on some of the things they've said. They ALL over-estimate, in fact it's part of their strategy to do so, especially to their investors. Setting high goals is what most successful companies or people do. If you were in sales and wanted to sell 100 units before the next qtr. you would set a projection sales goal for 135 to 150units. You would NOT set it at 100. You set a goal the EXCEEDS the desired amount in order to ensure that it is met.

  • godovivel

    Posted Sep 9, 2006 10:23 pm PT

    spoo_ U are wrong . go to this site :

    http://videogamecharts.com/page3.html

    360 has sold around 2.200 million units in NA

  • tutejaa

    Posted Sep 9, 2006 8:51 pm PT

    douche , they have sold more than 5million world wide by now :! US isn't the only market idiot. I think the sales will really pick up with Gears of Wars launch.

  • spoo_

    Posted Sep 9, 2006 6:54 pm PT

    @harry007
    "xbox 360 has sold around 3.75 million units worldwide............so come nov they would atbest beef up that figure to 5 million but again that is nowhere near the 10 million claim by MS."

    3.7 million Xbox 360s have sold in NA alone and more then 5 million have sold worldwide. I don't know where you got your numbers from but try to check your source before you post otherwise you sound like an ignorant fanboy. Also you must have no idea how retail works MS should be able to sell 2.5 million - 3.5 million this Nov. and Dec. in NA. And they should be close to the 10 million mark by the end of the year but you are right that it won't happen before Nov.

  • dajuand23

    Posted Sep 9, 2006 12:18 pm PT

    Amen NinjaFoot! Coming from someone who has worked in the videogame retail business for 4 years now I must say that you are absolutely correct. Guys like Sumotaii don't realize how much the industry itself depends so heavily on games like Madden and GTA (which these to games are known to be system sellers). Without them we may not be enjoying alot of the other games that are out there today. Exclusive deals are made all the time and sometimes it's unfortunate. The NFL 2k series was a great series but that doesn't mean it's better. Both games had their strengths, but they BOTH had there own weaknesess. That's just the way it goes. I just hate to see people bash on things without doing research first. I especially hate to see it when people hate on the games that help put this industry where it is today, that being the number one form of entertainment in the world. I may not play games like Final Fantasy or anything, but I know what type of impact those games have in the gaming community throughout the world and I absolutely respect that.

  • NinjaFoot

    Posted Sep 9, 2006 9:49 am PT

    Sumotaii, if it weren't for those 'idiots' who buy games like Madden and GTA, the industry would be in a much worse place than it is. Stop making yourself out to be superior in some way (you aren't) and just see things as they are. For gaming to continue to grow and not fester and die, it is going to depend on MORE of these 'idiots' buying up mass market games than is currently happening. Do you think the ps2 has been a runaway success because of the hardcore? It didnt hit the really astronomical sell through numbers until it hit a budget price that pretty much put it into impulse buy territory. And 'idiot' games like Madden and GTA being available for it didnt hurt either.

  • Humorguy_basic

    Posted Sep 9, 2006 8:55 am PT

    Amazing that the headline made it sound like everything was good! I mean doesn't 'August game-software revenue up 17.5 percent' make it sound like everything is well?

    Then you read down and see XBox 360 sales flat, with no competition, software sales paltry given no competition, Playstation 2 flatlining, even though PS3 was a long way off even with a Xmas release. We know PC gaming is down over 50% in 3 years with Peter Molyneux of Lionhead saying just last month that a PC version of a game alone cannot make a profit and needs console versions to do so. We have PC games back on the bad road of not running on average PC's, we have fewer and fewer genres to widen the market and we have a trend for more expensive games with less hours of gameplay (15 hours seems to becoming the average, that 3 or 4 years ago would have been 25 hours and 10 years ago 40 hours!). So why was a positive shine put on this news item? Because the media and industry overall has it's heads in the sand and think this breakdown in the video gaming market will sort itself out with no change on their part.

    Especially when it comes to gaming media we have not seen a change in how they cover the market in 20 years of gaming. Why one person to review a game? Why not three, all with interests in different genres, to give a better overall view (like they did in print magazine like Zzap magazine in the UK, a Commodore 64 gaming mag in the 80's)? How about follow up reviews 6 months after release to coincide with the hype having died down, patches having come out and the release soon to go on budget? Why should a game that had initial bugs get reviewed and slammed, then take the time to release patches that solve every problem and yet still have those initial '1.0' reviews on every website? What about reviews of mods and more coverage of the independent market? What about the media supporting the gamer rather than promoting the industry?

    Why, for example, should a $1.99 piece of armour for Oblivion get so much coverage, and yet a free utility that allows you to run the game better on a lower spec PC (called 'oldblivion') that helps 100,000's of gamers worldwide get no or little coverage? Why are 'niche' genres seen as 'dead' because they are not mainstream? Why can't a publisher release a lower budget game, that costs a little less to produce to sell to a small section of the market where sales will be smaller, but a profit can still be made? Why is it a game can only be successful if it cost $30 million to produce and sold 5 million+ units?

    As long as nothing changes in the gaming industry, sales will continue to fall, more and more 'average/mainstream' gamers will continue to walk away and find other interests, and the boom we saw in PC AND Console gaming we saw in the 90's become flat (18 months ago) then negative (last year) as we have gone through the first 6 year's of this century?

  • jsambeckwith

    Posted Sep 9, 2006 5:28 am PT

    Harry007:
    You are wrong in every respect. Get out. The Ps3 is not 'far superior' to the 360, the graphics are the same and the processor of the 360 has been shown to perform better in gaming than the Ps3, due to the fact it was designed specifically for that. There will not be 'total chaos' when the Ps3 launches. It will be far too expensive to even warrant a blip on most people's radar, and the launch games look, to put a finer point on it, crap.
    'The 360 has flopped in europe'. You live in Canada. How the hell would you know? I live in europe, and can saftely say it hasn't. So be quiet.
    'The most powerful consumer hardware ever made'. Have you ever heard of a personal gaming computer? Maybe you should look them up.

  • meimnobody

    Posted Sep 9, 2006 5:08 am PT

    Don't worry the Madden numbers will drop. Madden is an American game fad anyway.

  • dclive2000

    Posted Sep 9, 2006 4:20 am PT

    People kill me about the PS3. The console will be no diffrent that the 360. The DS is kicking azz now. Why?! People can afford it. Everyone keeps claiming " I'LL HAVE A PS3 WHEN LAUNCH". Yea, ok..... The only reason It'll sell because of the fanbase. Sony still doesn't have a official launch lineup and it's September?! $600.00 price tag. No HDMI cable included. No 1080p games when launch. No matter how much Sony is bending you guys over and screwing you ( with no lubrication), you still saying "I'M GETTING ONE AT LAUNCH". I still have not seen acutial game footage for at least several games for the PS3. Right now, I'm content with the 360. No matter what news comes out for the 360, fangirls always have an excuse to knock MS. I had my 360 since launch and no problems as of now. While you girls keep hope alive for the PS3, I'm playing next-gen right now on my 52in HDTV with the 1000 watt 7.1 Onkyo Surround Sound with music streaming wirelessely from my laptop as I play my "Next Gen" games. Europe, why did they push your release until 2007?! Oh well, let the ball bounce where it may.

  • faridmon

    Posted Sep 9, 2006 3:26 am PT

    am glad that i don't live in america, i mean Madden sold 2 million, thats just unbellieveble, thats new super mario bros numbers in just one week, are they for real? unbellieveble.
    and i loled at that guy said Dirge of Carbirus is great game, glad to see the DS doing its job, but in eurpe the DS is selling like hot cakes, but why is the sales of teh XBOX360 that low? i mean just 3.9, thats like 2 week of madden.
    hahaha

  • Sumotaii

    Posted Sep 9, 2006 1:57 am PT

    [This message was deleted at the request of a moderator or administrator]

  • Mystic_Virgo

    Posted Sep 9, 2006 12:09 am PT

    Love it

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