NPD: Game industry reaches $12.5 billion in '06

With the shift to the new generation of consoles finally complete, there's little left to discuss about the transitional year aside from how well the industry weathered it. The industry-tracking NPD Group today released its US retail gaming sales results for December and for the entirety of 2006, and the figures showed a record sales year and growth almost across the board.

When hardware, software, and accessories sales are combined, the total US gaming market for the year amounted to $12.5 billion, a 19 percent jump over 2005's $10.5 billion, which was the previous highest grossing year in US gaming. December alone saw the industry bring in $3.7 billion, 27.8 percent more than the $2.9 billion it brought in for December 2005. The figures did not include sales of PC games, PC game subscriptions, or downloaded content.

Last month, retailers racked up $1.7 billion in game sales, a 5.4 percent increase over December 2005. While sales of games for the recently released Nintendo Wii and the PlayStation 3 added to the tally, console software sales overall were virtually unchanged, up only about .5 percent. However, last month's portable game sales showed significantly more growth over December 2005, as they cumulatively jumped 18.8 percent to $521.6 million.

The numbers were reversed on the hardware side of the equation. While portable systems showed the strongest growth as far as software went, sales of the hardware were actually down for the month, slipping 5.7 percent from the year before to $488.7 million. It was the Wii and PS3 driving hardware growth last month, as December's $1.1 billion take for console hardware was double December 2005's tally and then some, up 131.2 percent from the year before. Combining the portable and console markets, hardware sales for the month were up 59.2 percent to $1.6 billion.

As for which piece of hardware proved to be the most popular for the month, the Nintendo DS led all systems with 1.6 million units sold, trailed by the PlayStation 2 (1.4 million units sold) and the Xbox 360 (1.1 million units sold).

The newcomers to the mix fell a little short of analysts' projections, as the Wii sold 604,200 units in December, while the PS3 managed to move 490,700 system sales. Combined with their November hardware sales tallies, the Wii sold 1.1 million systems in the US through the end of the year, while Sony managed to move 687,300 PS3s.

According to NPD's figures, the growth of game sales in December was very much in line with game sales growth for the whole year. The US game industry's total 2006 game sales take came in at $6.5 billion, a 6.4 percent increase over 2005, with portable game sales experiencing pronounced growth of 18.8 percent to $1.7 billion and console game sales up a more modest 2.6 percent to $4.8 billion.

Similarly, hardware sales for the full year mirrored the December trend. Console hardware sales were up 87.5 percent to $2.9 billion, while portable hardware sales actually slipped .3 percent, racking up $1.6 billion. Combined hardware for the year was up 42.8 percent to $4.6 billion.

For the month, EA's Madden NFL 07 was the best-selling game, managing sales of 1.9 million units across all platforms. Call of Duty 3 took the second spot as the only other million-unit seller for the month, with 1.1 million copies sold. Trailing those two were Cars, Need for Speed Carbon, and Gears of War.

The single best-selling game for the year was the PlayStation 2 edition of Madden NFL 07, which garnered sales of 2.8 million units (Hall of Fame edition included). New Super Mario Bros. for the DS came in second with 2 million units sold in 2006, followed by Gears of War (1.8 million units sold, including collector's edition), Kingdom Hearts II (1.7 million units sold), and Guitar Hero 2 (1.3 million units sold, with or without guitar).

"We were expecting it to be a great year, with two new consoles being introduced," NPD senior marketing manager David Riley told GameSpot. "Also, there were tons of great new games for existing platforms, including Final Fantasy XII, [The Legend of Zelda] Twilight Princess for GameCube, and Guitar Hero II for PS2. There were also holdover hits like New Super Mario Bros. for the DS."

Despite the flat numbers posted for portable hardware sales, Riley wasn't too concerned.

"I would prefer to say they're flat," he said of the figures. "It's a transition year for the console market, so there's a sector that's bound to suffer. The DS had a great year."