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NPD Group Reports 2004 Video Game Retail Sales

Filed under: General Gaming
Posted by Allison on January 18, 2005 11:22 AM
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According to The NPD Group, a leading marketing information provider, U.S. retail sales of video games, hardware and accessories, saw sales of over $9.9 billion in 2004. This represents a decline of less than one per cent when compared to the 2003 annual sales of $10 billion. Interestingly enough, while dollar sales were slightly down, unit sales were up 4%. This can be explained by a number of factors, including an increase in sales of lower cost portable game titles (which broke the $1 billion mark for the first time), a price drop in both PS2 and Xbox consoles, and a widely publicized shortage of certain consoles, pointing holiday buyers to the lower cost handhelds.

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Douglas Lowenstein, president of the Entertainment Software Association, believes these numbers show, "The video game industry shows no signs of slowing down," even in the "twilight" of this hardware cycle. The NPD Group's Anita Frazier believes these results, "clearly reveal the increasing appeal of video game playing as a leisure time activity among the largest consumer base in the history of the industry.".

Press Release

The NPD Group Reports Annual 2004 U.S. Video Game Industry Retail Sales; Console Software and Portable Game Hardware Lead Sales

PORT WASHINGTON, N.Y. --(Business Wire)-- Jan. 18, 2005 -- According to leading marketing information provider, The NPD Group, Annual 2004 U.S. retail sales of video games, which includes portable and console hardware, software and accessories, saw sales of over $9.9 billion -- a decline of less than one percent when compared to $10 billion in Annual 2003. However, while dollar sales were down slightly, total industry unit sales were up 4 percent over the same period last year.

Sales remained strong, thanks in large part to the console software, portable game software and portable game hardware categories, which saw dollar sales percentage increases of 7 percent, 11 percent and 10 percent, respectively. For the first time ever, sales of portable software titles broke the $1 billion mark. Total software sales also continued to set new records, with sales exceeding $6.2 billion, an increase of 8 percent in overall sales when compared to $5.8 billion in 2003. For 2004, console software, portable game software and portable game hardware also experienced healthy unit sales increases of 8 percent, 13 percent and 9 percent, respectively.

As a result of the widely-publicized hardware inventory shortages over the 2004 holiday season, the console hardware category saw the largest percentage reduction, with a 27 percent decline in dollar volume and a 16 percent decrease in unit volume in 2004. However, portable hardware dollar volume was up 10 percent in 2004 to over $828 million, from $751 million in 2003.

"This year's positive sales results clearly reveal the increasing appeal of video game playing as a leisure time activity among the largest consumer base in the history of the industry," said Anita Frazier, Entertainment Industry Analyst, The NPD Group. "The successful launches of some of the highest quality and best marketed titles ever produced, drops in price points for hardware, as well as the introduction of new hardware systems all helped make 2004 another stellar year for the video games industry."

"The 2004 sales figures are impressive, especially as we enter the twilight of this hardware cycle, and more significantly, looking ahead, the video game industry shows no signs of slowing down," said Douglas Lowenstein, president of the Entertainment Software Association, the trade association representing U.S. computer and video game publishers. "No other entertainment industry has posted the sustained growth over the last decade generated by the video game sector, and given the technological and creative advances ahead, all signs point to surging growth and more record sales for many years to come."

Annual 2004 Top 10 Video Game Titles, Ranked By Units Sold

RANK TITLE PLATFORM PUBLISHER RELEASE ARP DATE ---- -------------------------- --------- -------------- -------- ----
1 Grand Theft Auto: San PS2 Take II Oct'04 $49 Andreas Interactive ---- -------------------------- --------- -------------- -------- ----
2 Halo 2(a) XBX Microsoft Nov'04 $52 ---- -------------------------- --------- -------------- -------- ----
3 Madden NFL 2005(a) PS2 Electronic Aug'04 $49 Arts ---- -------------------------- --------- -------------- -------- ----
4 ESPN NFL 2K5 PS2 Take II Jul'04 $19 Interactive ---- -------------------------- --------- -------------- -------- ----
5 Need For Speed: PS2 Electronic Nov'04 $48 Underground 2 Arts ---- -------------------------- --------- -------------- -------- ----
6 Pokemon Fire Red W/ GBA Nintendo of Sep'04 $32 Adapter America ---- -------------------------- --------- -------------- -------- ----
7 NBA Live 2005 PS2 Electronic Sep'04 $33 Arts ---- -------------------------- --------- -------------- -------- ----
8 Spider-Man: The Movie 2 PS2 Activision Jun'04 $43 ---- -------------------------- --------- -------------- -------- ----
9 Halo XBX Microsoft Nov'01 $29 ---- -------------------------- --------- -------------- -------- ----
10 ESPN NFL 2K5 XBX Take II Jul'04 $19 Interactive ---- -------------------------- --------- -------------- -------- ----

Source: The NPD Group / NPD Funworld(R) / Point-of-Sale (a) Includes Limited & Collector's Editions *T

About The NPD Group, Inc.

Since 1967, The NPD Group has provided reliable and comprehensive sales and marketing information for a wide range of industries. NPD provides critical knowledge on what is selling, where, to whom and why to help our clients make more successful, fact-based business decisions. Today, more than 1,300 manufacturers and retailers rely on NPD to help them better understand their customers, product categories, distribution channels and competition in order to help guide their business and positively impact sales and revenues. Information from The NPD Group is available for the following major vertical sectors: apparel, appliances, automotive, beauty, cellular, consumer electronics, food and beverage, foodservice, footwear, home improvement, housewares, imaging, information technology, music, software, travel, toys and video games. For more information, visit www.npd.com.

About NPD Funworld(R)

NPD Funworld, a division of The NPD Group, provides sales and marketing information for manufacturers and retailers in the toy, video game and PC game industries. NPD Funworld provides the most accurate market intelligence available, including what is selling, where, to whom and why. All of this information is delivered online in a secure, Web-based environment by easy-to-use tools that make information accessible and actionable to a wide range of users from executives to sales and marketing to research. Today a host of market-leading companies in the industry rely on NPD Funworld for the knowledge they need to drive better, more fact-based decision making.









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