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http://biz.gamedaily.com/industry/feature/?id=17247

July NPD: Game Industry Soars to Nearly $1 Billion, Wii Tops All, PS3 Almost Matches 360

Who said summer was slow? July was fueled by NCAA Football, Guitar Hero and continued Wii and DS sales. The PS3 didn't beat 360 in unit sales as some analysts had predicted, but it was close. For the year, the industry could reach an incredible $18 billion, NPD's Anita Frazier told GameDaily BIZ. Much more within...

The NPD Group has sent GameDaily BIZ the latest video game sales data for the July reporting period, and the video game industry in the U.S. continues to reach new heights. Total industry sales were $925.5 million, up 37 percent year-over-year, and through July the industry has already totaled $7 billion in sales (tracking ahead of 2006 by 42.6 percent).

Hardware sales in particular saw much growth, rising 77.4 percent to $380.8 million. Of that total, console hardware dominated with $286 million in sales (a 140 percent jump), while portable hardware actually dipped one percent.

That said, the DS still fared quite well with 405K units sold. But it was the Wii, not the DS, that took top honors with 425K units. The news is encouraging for Sony as well, as the PS3 finally got over the 100K hump with 159K units sold, hot on the heels of the 360 which sold just 170K. Meanwhile, Sony's other platforms continued to put up respectable numbers – the PS2 sold another 222K and the PSP sold 214K. At the bottom of the list, the old GBA sold 87K units.

On the software side, total sales were up 11 percent to $419.2 million. Console software, as with hardware, made up the bulk of that with $313.2 million (a 15.9 percent bump). Portable software fell 1.5 percent. Year-to-date, software sales are at $3.3 billion, up 22.4 percent over 2006.

The big winner for July was clearly EA Sports' NCAA Football 08, whose total on the 360, PS2 and PS3 combined for 789K unit sales. As expected, Activision's Guitar Hero games and Nintendo's Wii Play, Mario Party 8 and Pokemon Diamond were all well represented too.

Here are the top ten best sellers (by units) for July:

1. NCAA Football 08—360—EA—397K
2. Guitar Hero Encore Rocks the 80s—PS2—Activision—339K
3. Wii Play w/remote—Wii—Nintendo—278K
4. NCAA Football 08—PS2—EA—236K
5. Mario Party 8—Wii—Nintendo—177K
6. NCAA Football 08—PS3—EA—156K
7. Pokemon Diamond—DS—Nintendo—144K
8. Transformers: The Game—PS2—Activision—143K
9. Guitar Hero II w/guitar—PS2—Activision—138K
10. Guitar Hero II w/guitar—360—Activision—108K

To get some perspective on the data, GameDaily BIZ went straight to the source: NPD industry analyst Anita Frazier.

With three of the top ten titles for the month coming from Activision's Guitar Hero franchise, it's clear that gamers can't get enough rock. The battle with Rock Band this fall is bound to be fierce.

"The Guitar Hero franchise has solidified its position as one of strongest and freshest video games offerings lately. As long as the future versions continue to bring something new to the table and are fun to play, I see no reason why the franchise can't continue to have great-selling new releases going forward," said Frazier. "Everyone who has played Rock Band or seen it demonstrated seems really excited about the game, so I think both of these have hit upon something that is really speaking to consumers, and not just the tried and true video gamer. I don't think there are any of us that haven't daydreamed about being a rock star after all."

We asked Frazier if the recent hardware price cuts were a major factor in the more than 77 percent growth for the month, and while she agreed to some degree, she also pointed out that cheaper platforms like the DS and PS2 played a large role too.

"Price cuts definitely played a part in hardware sales increases because we know there are price-sensitive consumers out there that were looking for reductions in order to make their purchases. However, the best-selling platforms didn't make any price cuts so hardware acquisition decisions are made by consumers on a variety of motivators. Price is one of them, but certainly not the only one. By far the most significant purchase motivator is the availability of desired content and that will play into hardware sales more than anything else," Frazier explained.

There's been plenty of talk about the impact of the GTA IV delay lately, and with the industry tracking ahead of last year by 42 percent, we wondered how the game's absence might bring down the final tally for 2007. Frazier, however, doesn't think the slip will make much difference.

"GTA IV was certainly eagerly awaited by fans, but at the most macro-level for the industry, I don't think its postponement will have that big an impact on total industry dollar sales once everything is tallied for the year," she said.

Echoing sentiments expressed by GameStop executives she added, "There are other very big games still to come that will really smooth over any hole left from GTA IV moving to 2008. What I really think is that 2008 will benefit from GTA IV because it will be no small task for the industry to measure up to this year's sales."

Indeed, 2007 could be one for the ages. "The industry is continuing to follow similar patterns as it has for the first half of the year, and really the only question to me now is 'how big can it get?' Based on July year-to-date figures, the industry looks like it will end up realizing somewhere north of $16 billion for the year, perhaps even closer to $18 billion," Frazier told us.



by James Brightman