Video Games are Nothing to Cry Over

Four-month Stats Show Accelerated Growth

By Lutz Muller
May 2008

“Video games … continue to defy the overall economic drag on consumption … ”

May 23 – Analysts have been crying “woe is me” all week, looking at the April numbers for video games from the NPD Group and lamenting that the end is nigh. Yes, monthly sales and year-over-year growth percentages for April were lower than those for March, but remember that this year, Easter fell in March.

The fact is, growth is still accelerating. The acceleration applies to hardware in units as well as for the hardware, software and accessories categories in dollars.

This graph accounts for sales of hardware in 1000 units — first for April in isolation and then for the four months cumulatively [source: NPD]:

Both show Sony’s PS2 beginning to decline, and April shows the first decline of the Nintendo DS. But overall, hardware is continuing to charge ahead.

The next graph is in millions of dollars for the three categories, for the four months cumulatively [source: NPD]:

The following graph shows the cumulative percentage growth in dollars per category, demonstrating that growth is still accelerating, albeit on a flattening curve as I predicted [source: NPD]:

In short, video games in all three categories continue to defy the overall economic drag on consumption, and there are no signs of this trend abating. This statement is not only based on NPD numbers but also on feedback from buyers as well as sell-through data from my retailer panel.