NPD: Video Game Revenues Slipped In Nov.

Price cutting promotions may have contributed
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Port Washington, N.Y. — Overall U.S. retail sales revenue for video game hardware, software and accessories declined 11 percent in the month of November from the same period in 2013, according to data released by The NPD Group.

The market research group reported that revenue from sales of video game hardware systems in the United States declined 23 percent to $1.01 billion for the month as overall software dipped 2 percent to $1.06 billion.

“While the majority of the decrease in dollar sales of hardware stemmed from an expected drop of seventh-generation console sales, eighth-generation sales also decreased and represented 38 percent of the total declines in hardware sales from November 2013 to November 2014,” according to NPD.

“Despite a decline in dollar sales, hardware unit sales for eighth-generation consoles increased by 3 percent over November 2013,” NPD said.

Cumulative PlayStation4 and Xbox One sales are now almost 80 percent higher than the combined total of PS3 and Xbox 360 sales after 13 months on the market, NPD said.

Microsoft highlighted NPD’s data showing that unit sales of the Xbox One outperformed Sony’s popular PS4 in November. It was the first time this year that the Xbox One beat out the PS4 in the U.S.

Mike Nichols, Microsoft’s Xbox marketing VP, stated: “November set a new record for sales of Xbox One, and Xbox One was the best-selling console in the U.S. and U.K. Response to the holiday lineup of games on Xbox One was incredible, with Xbox One fans buying more games in November in the U.S. than any other gen-eight platform and enjoying over 357 million hours of gameplay globally.  In fact, more fans logged into Xbox Live across Xbox One and Xbox 360, and enjoyed more entertainment, than any other month in the history of Xbox.”

The performance of the Xbox One was helped significantly by a number of price promotions that dropped as low as $329 at one point. Sony, for the most part, shied away from price cutting to push holiday volume.

NPD’s video game analyst Liam Callahan said in research notes on the month: “For the most part throughout 2014, we have seen software declines that were offset by year-over-year increases in hardware spending. This November, however, hardware declines totaled $294 million while software declined $17 million or 2 percent.  Accessory sales increased by a modest $5 million.”

NPD said current year-to-date sales across hardware, software and accessories through November 2014 are up 2 percent.

 The research firm said hardware bundles played a big role in driving sales during the month, with a number of new bundles ranking as the highest-selling hardware bundles so far this year.

Declines for video game software stemmed from “losses from consoles software as portable software and PC games software increased over November 2013.”

Portable software increased by 25 percent due to the combined performance of “Pokemon Alpha Sapphire,” “Pokemon Omega Ruby” and “Super Smash Bros.” for the 3DS, according to NPD.

PC game sales increased by 34 percent over November 2013 due to “The Sims 4” and the launch of “World of Warcraft” expansion, “Warlords Of Draenor.”

“Seventh-generation console sales combined to decrease by 49 percent or $361 million from November 2013.  Eighth-generation console software sales and portable software sales increased by $342 million and could not offset the losses stemming from seventh generation console,” said Callahan.

In accessories, sales increased by 2 percent to $331.2 million due to increased sales of interactive gaming toys, and headsets/headphones, NPD said, with headsets/headphones representing the largest volumetric growth.

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