NPD: April's sweet 16 gives temporary reprieve

Industry leaps to 16 percent increase over April '05, but most analysts don't see trend continuing through summer; Kingdom Hearts II, MLB 2K6, Xbox 360 availability spur sales.

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When NPD Funworld, a research group that tracks sales figures in the gaming industry, revealed the numbers for March 2006, they didn't exactly stack up to the figures from March 2005. With the console transition leaving many saving their pennies and Xbox 360s still trickling out into stores, sales were down a staggering 16 percent year-on-year.

April's showers did more than just boost their usual flora, as last month picked up some major slack with sales up 16 percent when compared to April 2005. Overall sales hit $699 million last month, with April '05 netting $602 million. Consistency was the story in April, with both the hardware ($223 million) and software ($395 million) sectors posting equal 16 percent jumps in sales, and accessories ($69 million) slightly higher at 19 percent over April 2005.

NPD analyst Anita Frazier spoke about April's success with GameSpot News. "The multimonth malaise that has faced the industry due to the console transition and the lack of blockbuster titles appears to have eased off," she said. "Year to date, the industry is down just one percent. It appears that the greater availability of inventory of 360s at retail had a significant impact on the industry, since the console hardware category contributed the most to total industry growth."

Agreeing with Frazier is industry analyst firm Friedman Billings Ramsey, which cites sales of Microsoft's next-gen console having risen 54 percent from the previous month, selling 295,000 units in April in North America (by comparison, the PlayStation 2 sold 207,000 units, the Xbox sold 39,000, and the GameCube 38,000). In addition to the loot raked in from consumers buying the console itself, the additional sale of peripherals and a 4.5 tie ratio with software, most of which sold at a $60 price point, helped boost April's numbers.

Even with many gamers jumping onto the Xbox 360 bandwagon, the biggest selling title for the second consecutive month by far was Square Enix's Kingdom Hearts II for the PlayStation 2. After selling more than 600,000 copies in three days in late March, the game sold an additional 535,000 units in April, topping the one-million-sold mark in less than a month on shelves.

Other top sellers in April benefited from multiplatform releases. Sliding into second was Take-Two Interactive's MLB 2K6, which was released on the PS2, Xbox, Xbox 360, and PlayStation Portable. Lara Croft returned to gaming in the third slot with Tomb Raider: Legend for the PS2, Xbox, Xbox 360, and PC. Reinforced by its release on new platforms, Tom Clancy's Ghost Recon Advanced Warfighter from Ubisoft held down the fourth slot (though most of the sales were from the Xbox 360 version), and Take-Two's The Elder Scrolls IV: Oblivion took fifth.

As for individual publishers, last month was feast or famine compared to April '05. Electronic Arts, with three titles in last month's top 10--Fight Night Round 3, The Godfather, and Battlefield 2: Modern Combat--saw its sales jump 44.5 percent from April '05. On the other side of the spectrum was Activision, which fell 44.2 percent, without a big-name title like 2005's Doom 3 to carry it. It was also up and down for Take-Two and THQ, with sales that climbed 36.5 percent and dropped 29 percent, respectively.

Though current-gen unit software sales were up slightly at 3 percent, according to research firm Wedbush Morgan Securities, some of that increase was offset by a decrease in average price. Even though current-gen systems had a strong showing last month, Wedbush analyst Michael Pachter doesn't see the trend continuing.

"We consider the 3 percent unit sales increase for current-generation software an anomaly and continue to believe that a slowdown in software sales will persist and weaken through the summer months," he explained. "Going forward, we expect the decline in current-generation software sales to be larger than the lift from next-generation sales, at least until the Sony PS3 and Nintendo Wii are launched."

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