The NPD Group reported increases in digital forms of content distribution offset declines in retail sales of software.
portable, 3D-without-glasses-capable 3DS console moved an impressive 400,000
units since its launch on March 27, the video game industry posted an overall
decline in sales of 4 percent from the same period last year, according to NPD
Group. The industry sold $1.53 billion worth of hardware, software and
accessories in March, down from $1.58 billion in March 2010.
Hardware sales accounted for
$494.5 million in overall sales, up 12 percent from the same period in 2010,
while sales of software fell to $735.4 million, a noticeable 16 percent drop
from the same period last year. Sales of video game accessories rose 13 percent
in this interval to $241.3 million.
"While new physical
sales of video game hardware, software and accessories are down 1 percent in
the first quarter of 2011, the trends we've measured with regard to growth in
digital formats like full game and add-on downloads, micro-transactions, mobile
apps and social network gaming will likely result in net industry growth when
we release our full measure of the first quarter consumer spend on games in
June," said NPD analyst Anita Frazier.
Frazier said the 3DS launch
compares "quite favorably" to that of the best-selling dedicated handheld
gaming platform of all time, the Nintendo DS. "While the 3DS sold about
100,000 units less than the DS did in its launch month, we must consider that
the DS launched in November and had holiday seasonality and a price
differential of about $100," she noted. "Because of the price differential, the
3DS generated greater revenues than did the DS in its launch month in November
2004. In addition, the 3DS was launched in an environment where there are more
devices that can support the portable gaming experience such as tablets and
The Nintendo 3DS features
two screens: The top screen displays 3D images without the need for special
glasses, while the bottom screen is touch-sensitive. It also has three cameras-one
inner camera points at the user, while two exterior cameras let users take
pictures of others in 3D or 2D. It weighs approximately eight ounces and is
available in Cosmo Black or Aqua Blue for $250.
The Sony PSP and PS3
platforms each enjoyed a unit sales increase over last March, as well as
Microsoft's rival Xbox 360 console, the company noted. The PSP benefited from a
$40 per unit price reduction, which occurred at the beginning of the reporting
period. NPD reported the No. 1 accessory for March 2011 was the $20 PS3 Network
Card, which is the second time since its introduction in June 2008 that it has
ranked first. Frazier said this was another indication of digital growth across
consoles and how physical retailers are participating.
"We found that increases in
some digital forms of content distribution offset the declines in new physical
retail sales of software," she said. "2010 saw a consumer spend on games
content of $15.9 billion, which was essentially flat [down less than one half
of one percentage point from] 2009."
Nathan Eddy is Associate Editor, Midmarket, at eWEEK.com. Before joining eWEEK.com, Nate was a writer with ChannelWeb and he served as an editor at FierceMarkets. He is a graduate of the Medill School of Journalism at Northwestern University.