Once again US retail sales rose compared to last year, and once again the cause can be attributed to one thing: Grand Theft Auto V. NPD’s Liam Callahan put it this way:“This is the third month in a row where overall video game retail sales increased, up 5 percent over October 2012 due to 10 percent software growth combined with a modest 1 percent growth of accessories, while portable hardware sales minimized decreases in overall video game hardware sales.” In other words, accessories were flat, hardware was down, and software rose due to the combined effect of a new Grand Theft Auto title, new Pokémon titles, and a new Battlefield, Batman, Assassin’s Creed and Skylanders titles. With all of those new top franchises with new software, the category could only eke out a 10 percent improvement over October 2012.
You already know who the winner was for the month. “Grand Theft Auto V was the top selling game for the second month in a row, selling just fewer than 1.1 million units and representing 15 percent of dollar sales,” noted Callahan. “New launches were the main driver of software sale increases, with a 9 percent increase of sales from October 2013 launches compared to October 2012 launches during their respective launch month.”
TakeTwo had a good month to follow its spectacular September, with three different titles in the Top Ten. Activision’s Skylanders SWAP Force came in lower than perhaps might be expected, but its peak buying time is really still coming up. Activision will have an excellent November in any case with Call of Duty: Ghosts sales hitting the bottom line.
October 2013 Top 10 Games
1. Grand Theft Auto V (360, PS3)** Take 2 Interactive (Corp)
2. Pokémon X (3DS) Nintendo
3. Pokémon Y (3DS) Nintendo
4. Battlefield 4 (360, PS3, PC) Electronic Arts
5. Batman: Arkham Origins (360, PS3, NWU, PC)** Warner Bros. Interactive
6. Assassin’s Creed IV: Black Flag (360, PS3, NWU)** Ubisoft
7. NBA 2K14 (360, PS3, PC)** Take 2 Interactive (Corp)
8. Skylanders SWAP Force (WII, 360, PS3, NWU, 3DS) Activision Blizzard (Corp)
9. Lego Marvel Super Heroes (360, PS3, NWU, 3DS, PSV, PC) Warner Bros. Interactive
10. WWE 2K14 (360, PS3) Take 2 Interactive (Corp)
Hardware sales dropped 8 percent over last October, even with strong 3DS sales to help. That’s really no surprise, given the new consoles being introduced this month. There are a number of new bundles for the Xbox 360, PS3 and Wii U being introduced this month, which should help hardware sales for November and December. “October 2013 marked the sixth consecutive month that the Nintendo 3DS led overall hardware sales,” said Callahan. “3DS hardware sales were supported by the launch of Pokémon X and Pokémon Y, as well as from sales of the newest member of the 3DS family, the lower-priced 2DS. The success of the 3DS helped lift portable hardware sales, which was the first time portable hardware sales increased since February 2012 (excluding January 2013 due to an extra week or reporting), when the PS Vita launched.”
The Accessories category has been redefined to include toy/game hybrids like Skylanders, and thus experienced a slight increase. “Accessory sales rose by a modest 1 percent due to an over 70 percent increase for sales of Interactive Gaming Toys with combined sales of Disney Infinity and Skylanders items, including those from the new Swap Force, lifting sales from last year,” Callahan noted.
It’s important to put the NPD retail sales figures in context. “These sales figures represent new physical retail sales of hardware, software and accessories, which account for roughly 50 percent of the total consumer spend on games,” said Callhan. “When taking into account our preliminary estimate for other physical format sales in October such as used and rentals at $89 million, and our estimate for digital format sales including full game and add-on content downloads including micro-transactions, subscriptions, mobile apps and the consumer spend on social network games at $491 million, the total consumer spend in October is just over $1.3 billion.”
So comparing retail sales from this year to previous years is not a very accurate comparison, as more spending is shifting to digital. This tracking problem will only get worse as new games are released day and date on digital and at retail for next-gen consoles.
Console mid-list games have been disappearing over the last couple of years, and part of the reason is the acceleration of downloadable content sales. Publishers are putting effort into more content for the top games, and that is done by removing mid-list games from the publishing schedule. The result is more higher-margin revenue for the publisher, and unfortunately it doesn’t get tracked as easily as retail sales. This shows up as declining sales in NPD’s reports.
The really difficult part about the shift to digital is that it’s much harder to track than retail sales. There’s only a few publishers and retailers to keep track of in order to get a 90 percent or more accurate picture of retail sales, and NPD has agreements in place to do that. The digital picture is much murkier, since retail is so fragmented. Does Valve share Steam sales figures with analyst firms If it doesn’t, how accurate can analyst firms be at tracking digital game download revenue That’s not even considering all of the indie publishers now selling through consoles, or selling PC content on a wide range of web sites.
NPD and other analyst firms are trying hard to overcome these problems, of course. No doubt their models and ability to track digital revenue will improve over time. However, it’s unlikely to approach the familiar accuracy of retail sales tracking. Pay close attention to whatever they tell you about methodologies used for coming up with their numbers, and weigh the results with that information in mind.
The Aaron Levenstein quote about statistics applies to game sales. “Statistics are like a bikini. What they reveal is suggestive, but what they conceal is vital.” Think about that when you look at sales figures and statistics about the game industry from any source.