NPD: Industry Sees 13% January Growth

Though many publishers are curtailing upcoming profit projections, market research firm NPD says January saw even more year-on-year growth for the U.S. game industry than December. Software and hardware combined reached $1.33 billion in revenue for the month, a 13 percent jump over $1.18 billion in January 2008. Hardware sales were the larger driver, growing 17 percent to $445.4 million; software sales grew 10 percent to $676.6 million. Accessories were up 11 percent year on year. Despite the continued growth, sales are still not increasing at the rate they were in recent years; 2008 overall saw an average of 19 percent growth, and in 2007 the industry grew a staggering 47 percent. In the current climate, however, continued growth should be seen as a reassuring sign, says NPD's Anita Frazier: "Even in these tough economic times, the fact that total sales were able to realize a 13 percent increase in revenue (compared to [January 2008]) speaks to the continued strength of video games as one of the leading entertainment industries in the U.S." Hardware Nintendo's two consoles remained in the top slots again this month, but swapped places, with Wii taking the lead and Nintendo DS in second. As usual, Xbox 360 took the third slot. Sony's machines shuffled around as well, with PlayStation 3 beating out PSP this month, followed by PlayStation 2. Wii - 679.2K Nintendo DS - 510.8K Xbox 360 - 309.0K PlayStation 3 - 203.2K PSP - 172.3K PlayStation 2 - 101.2K The relative strength of hardware growth to software growth this month is unusual, with the current-generation systems having already been on the market for years, but Frazier suggests this is a positive sign that indicates new game consumers coming to the market. "We would expect to see a greater percentage of total industry sales generated by software sales, but the continued strength in hardware sales is changing that scenario a bit," she writes. "This will have a long-term positive impact on the industry as the user base expands. Software sales still increased 10 percent over last January, indicating that continued strong hardware sales are not occurring at the expense of software sales." Software The bestselling game chart paints a very familiar picture to NPD watchers, as Nintendo dominates the list with Wii Fit, Wii Play, and Mario Kart for Wii and DS -- impressively, the two-and-half-year-old New Super Mario Bros also jumped back onto the charts at number eight. Valve's zombie shooter Left 4 Dead was the highest-selling non-Nintendo game, followed by Treyarch's Call of Duty: World at War and EA Black Box's Skate 2. Reliable charter Guitar Hero: World Tour came in at number seven. Finally, the Xbox 360 version of Pandemic's Lord of the Rings: Conquest rounded out the list. Wii and Xbox 360 were each represented four times on the list, and Nintendo DS took two slots, leaving no room for PlayStation-family titles on the top ten. 1. Wii Fit (Nintendo, Wii) - 777K 2. Wii Play (Nintendo, Wii) - 415K 3. Mario Kart Wii (Nintendo, Wii) - 292K 4. Left 4 Dead (Valve/EA, Xbox 360) - 243K 5. Call of Duty: World at War (Treyarch/Activision, Xbox 360) - 235K 6. Skate 2 (EA Black Box/EA, Xbox 360) - 199K 7. Guitar Hero: World Tour (Neversoft/Activision, Wii) - 155K 8. New Super Mario Bros. (Nintendo, NDS) - 135K 9. Mario Kart DS (Nintendo, NDS) - 132K 10. Lord of the Rings: Conquest (Pandemic/EA, Xbox 360) - 113K Complementing her hardware analysis, Frazier sees the similar month-to-month makeup of the chart not as reflective of development stagnation, but rather as indicative of overall growth. "Only two of the top 10 games this month were new releases. The continued strength of games that have been in the market for some time clues us into just how many new consumers are coming into the industry," she explains. "This broadening of the audience for gaming will help buoy the industry through these tough economic times, provided they have enough compelling content to keep them interested."