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Retail

US gaming spend hit $2.88 billion in Q2 - NPD

US gaming spend hit $2.88 billion in Q2 - NPD

Thu 05 Sep 2013 2:29pm GMT / 10:29am EDT / 7:29am PDT
BusinessRetail

Digital sales accounted for more than 61% of the business as research firm finds software tally down 3% year-over-year

Americans spent $2.88 billion on gaming software in the second quarter according to the NPD Group, down 3 percent year-over-year. The research firm announced the numbers today as part of its quarterly Games Market Dynamics: US report.

More than 61 percent of the industry's gaming content revenue--$1.77 billion--came digitally, whether it was from subscriptions, full-game downloads, add-on content, or mobile/social games. New physical games added another $769 million to the total, with used sales and rental revenues kicking in another $343 million. Those numbers don't include any hardware or accessories; when those are factored in, total spending was down 9 percent according to the NPD.

NPD analyst Liam Callahan chalked the shortfall up to the physical games business, which continues to struggle in advance of the Xbox One and PlayStation 4 launches.

"The decrease in new physical spending is partly due to the decline in the number of new SKUs released at retail, (with 37 percent fewer new SKUs in Q2 '13 compared to Q2 '12) which is to be expected as developers, publishers and consumers alike prepare for the next hardware generation," Callahan said. "Increases in digital format spending offset nearly all the losses from the declines in physical format spending, with digital full game downloads and downloadable content spending experiencing a combined 27 percent increase (when compared to Q2 '12). Spending increases occurred across both video games and PC games in the digital format."

9 Comments

James Ingrams
Writer

208 72 0.3
If games disappear from retail, which seems to be happening, I believe the games industry, especially at the top, will be severely hit.

Mom and Pop, Uncle Joe or Auntie Jill are not going to b sitting next to little Johnny as he browses various online games stores. This means when Auntie Jill get married and has kids, for the first time, in 30 years, there will be a break between on generation and the next. How will Jill's kids become gamers when nobody is taking them to the mall and he/she see that video game store and wants to go in? How does Jill's kids become gamers?

Certain circumstances will mean some kids will, of course, but the numbers will be way down on what thy are now!

I also wonder if online sales numbers by NPD include Steam's and GOG's retro titles and whether that is making the numbers look better>?

Posted:7 months ago

#1

Steve Goldman
Journalist.

82 92 1.1
These numbers are misleading both on the physical and digital side.

Posted:7 months ago

#2

Nicholas Pantazis
Senior Editor

963 1,160 1.2
Again, I feel like we should all be clear here that NPD has NO ACCESS to digital sales data from the largest digital retailers (Apple, Google, Valve, EA, Sony, Nintendo, and Microsoft). Nor do they have access to sales on those services from the publishers and developers selling their games there (as they are all bound by contract to not release that information). No one has sales data on these services, so, you know, take this with a continent-sized load of salt.

Posted:7 months ago

#3

David Riley
Director

2 0 0.0
Nick, you're wrong. I'm surprised that a representative from such a well respected and admired web site is telling gamesindustry.biz readers about The NPD Group's business as if it's fact. Since when did vgchartz get into the business of spreading misinformation?

Posted:7 months ago

#4

Nicholas Pantazis
Senior Editor

963 1,160 1.2
@ David I don't do data tracking at VGChartz I write for the editorial, news, and reviews site gamrReview which is under VGC's ownership. I apologize if I'm incorrect, but as far as I'm aware there are long-standing policies preventing the sharing of digital sales information on most of these markets (though not Google Play).

I'd love to know which of those companies provide data to you and to what extent, as particularly Valve's running policy on providing digital sales information is that they simply don't, nor do they allow outside publishers to give Steam sales information for their games.

Edited 1 times. Last edit by Nicholas Pantazis on 6th September 2013 1:25am

Posted:7 months ago

#5

David Riley
Director

2 0 0.0
Journalists understand the importance of professional ethics; they do not insert opinion into their news, nor do they consistently miss the mark when it comes to reporting facts.

Sycophants who have an axe to grind need to walk away from their keyboards, especially in this industry.

Posted:7 months ago

#6

Nicholas Pantazis
Senior Editor

963 1,160 1.2
Again David, I apologize for misrepresenting you, but I'd still be interested in which of these markets you are able to track. I had no ax to grind against NPD, but I have trouble believing information at face value without some background on how the tracking is performed (doesn't even need to be that detailed). Especially when I do have some credible information about how difficult it is to get digital sales data from these companies, and have seen the existing policy against publishers providing Steam data.

I'm very sorry if I offended you or misrepresented your company, but if you're willing I'd still love some clarification.

Posted:7 months ago

#7

Kim Pallister
Director of Content

10 2 0.2
@Nick: http://www.gamesindustry.biz/articles/2013-07-02-npd-preparing-to-track-digital-sales-this-year
Not sure the detail behind their methodology, but If they have the major publishers (the link above claims 9), that will likely give them enough sample points on the "Top N" lists to plot a curve and make some good estimates. Might be messier for lists that are fudged some (e.g. not sure how 'top grossing' list for Apple has evolved over time when it mixes in F2P titles). (btw, if you buy their report there might be more detail on the methodology :-)

@David: Nick was off-base on the assumptions, but I don't think the name calling was called for. Let's all try to play nice. :-)

Posted:7 months ago

#8

Christian Keichel
Journalist

413 559 1.4
@Kim
From the article you linked:
While that service is not yet available, NPD is looking to launch "quickly" because of the new consoles hitting the market this holiday season.
We aren't at liberty to say who is participating at this time, since we are in the beta (proof of concept) stage
Eventually, NPD's digital tracking will be fully integrated into its monthly reports to paint a more comprehensive picture of the industry's health. How and when that happens is still unclear
With all these points in mind, I think, it's only fair if Nicolas says
Again, I feel like we should all be clear here that NPD has NO ACCESS to digital sales data from the largest digital retailers (Apple, Google, Valve, EA, Sony, Nintendo, and Microsoft).
because not even the NPD says otherwise and if the article here quotes numbers the NPD group has given out about the digital revenues of the US market, the article you mentioned is quite clear on this subject:
To be clear, the digital data that NPD will be tracking in partnership with research firm EEDAR will be completely global, unlike its retail data, which covers the North American market only.

Edited 2 times. Last edit by Christian Keichel on 6th September 2013 11:33pm

Posted:7 months ago

#9

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