NPD: December Sales Set $5B Record, Industry Grows 9 Percent

Though industry growth has slowed, tracking firm NPD reports that the game industry is still seeing more revenue than ever before, with December 2008 logging the highest single-month revenues in video game history. December sales were up 9 percent year-over-year, reaching $5 billion -- a figure that roughly matches industry revenue for the entire year of 1997. (Note, however, that those 1997 yearly sales would equal approximately $6.44 billion today, adjusted for inflation.) Still, sales for 2008 overall were up 19 percent year-over-year, meaning December technically underperformed growth-wise compared to mid-year sales. NPD analyst Anita Frazier also points out that the record sales are helping some companies in a considerably disproportionate manner to others. "We get asked a lot why there are so many layoffs and studio closings occurring in the industry when it has just realized another record-breaking year," she says. "This is not a case of the rising tide lifting all boats. The increases are not being enjoyed equally by all manufacturers and publishers." Hardware Wii, the frequent monthly hardware champ, was unseated in December by Nintendo's other current system, the Nintendo DS, which moved 3.04 million units and became the first console to break the 3 million unit barrier in a month. Nintendo's motion-sensing system came in second with 2.15 million units, followed by Xbox 360 with 1.44 million. As it did last month, Sony's PSP outsold its PlayStation 3 with 1.02 million sales to PS3's 726,000. PlayStation 2 brought up the rear with 410,000 units. Nintendo DS - 3.04 million Wii - 2.15 million Xbox 360 - 1.44 million PSP - 1.02 million PlayStation 3 - 726K PlayStation 2 - 410K Frazier points out that even as we are well into the current console generation, the rate of hardware adoption has continued to rise: "38 months into this generation of hardware, the three new systems have sold a combined 38.2 million units, whereas at the same point last generation, in December 2003, the three systems had sold 36.9 million units," she writes. Software Nearly two years after its debut, Nintendo's Wii Play and Wii remote bundle topped the December chart with 1.46 million sales, also topping the full-year chart. The Japanese publisher dominated the top 10, laying claim to half of its spots -- an achievement it replicated in the full-year chart, which included the same Nintendo-published games with the exception of Super Smash Bros. Brawl taking the place of Animal Crossing: City Folk, and the DS version of Mario Kart replacing its Wii counterpart. Activision Blizzard turned in the second-strongest performance in December, charting with the Xbox 360 and PS3 SKUs of Call of Duty: World at War as well as the Wii version of Guitar Hero: World Tour. However, Take-Two Interactive beat out Activision for the second-place finish in the yearly chart, with Rockstar's two SKUs of Grand Theft Auto IV. Heavy-hitter Electronic Arts had one entry on the December list -- Valve's Left 4 Dead -- and one on the 2008 list -- the Xbox 360 SKU of Madden NFL 09. December 2008 Sales 1. Wii Play (Nintendo, Wii) - 1.46 million 2. Call of Duty: World at War (Treyarch/Activision, Xbox 360) - 1.33 million 3. Wii Fit (Nintendo, Wii) - 999,000 4. Mario Kart Wii (Nintendo, Wii) - 979,000 5. Guitar Hero: World Tour (Neversoft/Activision, Wii) - 850,000 6. Gears of War 2 (Epic Games/Microsoft, Xbox 360) - 745,000 7. Left 4 Dead (Valve/EA, Xbox 360) - 629,000 8. Mario Kart DS (Nintendo, NDS) - 540,000 9. Call of Duty: World at War (Treyarch/Activision, PS3) - 533,000 10. Animal Crossing: City Folk (Nintendo, Wii) - 497,000 2008 Full Year Sales 1. Wii Play (Nintendo, Wii) - 5.28 million 2. Mario Kart Wii (Nintendo, Wii) - 5.00 million 3. Wii Fit (Nintendo, Wii) - 4.53 million 4. Super Smash Bros. Brawl (Nintendo, Wii) - 4.17 million 5. Grand Theft Auto IV (Rockstar/Take-Two, Xbox 360) - 3.29 million 6. Call of Duty: World at War (Treyarch/Activision, Xbox 360) - 2.75 million 7. Gears of War 2 (Epic Games/Microsoft, Xbox 360) - 2.31 million 8. Grand Theft Auto IV (Rockstar/Take-Two, PS3) - 1.89 million 9. Madden NFL 09 (EA Tiburon/EA, Xbox 360) - 1.87 million 10. Mario Kart DS (Nintendo, NDS) - 1.65 million Though analysts have suggested rhythm games like Rock Band 2 and Guitar Hero: World Tour have passed their prime fad period, Frazier points out that "both properties realized their best month yet in dollar sales, and combined represent 16% of total software dollar sales this month." Looking at the year in aggregate, the analyst also notes, "Software sales reached nearly $11B, which is more than total industry revenues were in 2005."