Video Game Sales Skyrocket ...

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**RussWakelin**

From Gamebiz Daily:

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Feature Article</td> <td class="gy10" align="right" width="249">10/12/2006 4:51:39 PM</td> </tr> </tbody> </table> </td> </tr> <tr> <td height="7"> </td> </tr> <tr> <td width="499" background="/Img/dotted_h.gif" height="1"> </td> </tr> <tr> <td height="12"> </td> </tr>  <tr> <td class="gy12"><strong class="gy18">NPD: September Game Sales Soar 38%[/b]

<strong class="biz_b12">September marked another stellar month for the video game industry with gains in every category. In fact, things have been going so well that the "dreaded console transition" seems like a distant memory. NPD analyst Anita Frazier tells us that she's confident 2006 will set an all-new record. The only question is, "How high?"[/b]

</td> </tr> <tr> <td class="gy12">The NPD Group today revealed to GameDaily BIZ that video game sales for the month of September were $777 million, up an impressive 38 percent over 2005. Moreover, all categories (hardware, software, and accessories) realized 20 percent or greater gain. "Yes, I'd have to agree that it was a great—even fantastic—month for video games," remarked NPD Entertainment Industry Analyst Anita Frazier.

The most growth, however, came within the hardware category, which was up more than 70 percent. The Nintendo DS continues to dominate, outselling not only other portables but also all consoles. During September the DS sold over 403K units compared to the PSP's 153K units. Frazier said she believes the DS performance was fueled in part by the introduction of the new DS Lite colors—Onyx and Coral Pink. On the console side, the Xbox 360 sold over 259K units but was once again beaten by the aging PS2. Frazier added, "Of course the strong dollar sales performance is also significantly impacted by the Xbox 360 which now has a U.S. install base of nearly 2.7 million units. The PS2 continued to record very strong unit sales as well, selling over 300K units this month—and in fact, the best-selling video game year to date is the PS2 exclusive Kingdom Hearts II."

<table cellspacing="0" cellpadding="6" width="90%" align="center"> <tbody> <tr> <td class="quoteLarge">[</td> <td class="quote">"There is no doubt in my mind that this will be a record year for the industry," Anita Frazier, The NPD Group</td> <td class="quoteLarge">]</td> </tr> </tbody> </table>

Looking at software, THQ's Saints Row for Xbox 360 took the top spot in dollar sales and there were strong contributions from LucasArts' Lego Star Wars II: The Original Trilogy and Nintendo's Pokemon Mystery Dungeon (GBA and NDS). Overall 15 SKUs managed to sell over 100K units, which is in stark contrast to just 7 from September 2005. "I had expected it to be a strong software month if only from the sheer strength of the franchises behind some of the new releases, but the breadth of the strength surprised me," Frazier commented to GameDaily BIZ.

Frazier also thinks that much of the concern over the console transition has been overblown. "I know there was a lot of concern about the industry earlier this year, in large part due to the downturn which started last year and continued well into this year. While many attributed this to the console transition, I've always been a believer that since games are entertainment, if a compelling game comes out that people want to play, they won't put off being entertained now in anticipation of a new system release. While there may be some that do that, particularly those early adopters of new technology, there are a whole lot more gamers out there that fall outside that 'heavy gamer' segment," she explained.

Not only have the past few months been very positive for the video game industry, but Frazier believes that 2006 could very well be another record breaking year in the U.S. You may recall that the U.S. video game industry topped $10.5 billion in 2005 (slightly higher than the 2002 record of $10.2 billion), but there's a good chance that 2006 could obliterate 2005's figure. Year-to-date, the industry is up 11 percent versus the same time period in 2005.

Said an enthusiastic Frazier, "There is no doubt in my mind that this will be a record year for the industry. The question that remains is, 'How high can it go?' I don't believe $13 billion is out of the question at all. With several highly anticipated game releases still to come, not to mention the launch of two new console systems in November between the Wii and the PS3, it's no doubt that there will be a lot of video games items under trees this holiday."

by James Brightman

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