NPD: August game-software revenue up 17.5 percent

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.