Game Console Sales: Like Christmas in July

When it comes to sales, Nintendo’s Wii continues to lead the pack of current-generation video game consoles, according to NPD Group. However, the real eye-opener, from NPD’s perspective, is the unexpected mid-summer sales boom involving just about everything related to the games.

Those following the console wars tend to focus on the ups and downs of the three contenders. On that front, NPD’s July sales figures show Nintendo’s Wii leading the field by many lengths.

Nintendo sold about 425,000 Wii consoles in the United States during July, more than double the 170,000 Microsoft Xbox 360s that left the shelves and almost triple the 159,000 Sony PlayStation3s that were sold, said NPD.

Growth Matters to Sony

It wasn’t all bad news for Sony. After cutting the price of the PS3, the company saw the console make the largest month-to-month sales increase of any so far in 2007. Only 98,500 PS3s were purchased in June.

“From a PlayStation perspective, coming out of E3 (the Electronic Entertainment Expo) we were really anticipating a good reaction to our new hardware pricing announced on July 9th, and we were obviously very pleased to see that PS3 sales increased with 159K units sold at retail for the month of July, which puts us up 61 percent over June numbers,” Sony Analyst Relations Manager Mariam Sughayer wrote in a blog.

The sales boost was partly caused by the new pricing, but might also be related to “a great deal of anticipation for the line up of games just around the corner, including ‘Warhawk’ (Aug. 28), ‘Lair’ (Sept. 4) and ‘Heavenly Sword’ (Sept. 12),” she said.

It was worse news for the Xbox 360, which was the only one of the home consoles to have a decrease in sales compared to June, when about 198,000 Xbox 360s were snapped up.

No Summer Doldrums

July is “typically one of the slower months for the video game industry, falling between June and the related Father’s Day and graduation gift occasions and ‘Madden’ month,” NPD gaming analyst Anita Frazier pointed out.

However, this July was anything but slow, as “the industry realized nearly US$1 billion in sales for the month and year-to-date is up nearly 43 percent from the same time period in 2006,” Frazier said.

The industry’s pace of growth — if it continues — will weigh in at $16 billion to $18 billion in sales for the year, predicted NPD gaming analyst David Riley.

“What Anita says is spot on,” Riley told the E-Commerce Times. “It is rather shocking to see this type of increase in the middle of the summer. It surprised me because typically this is a very slow period for the industry. There aren’t a lot of titles released and everyone is prepping for the holidays.”

The industry gained about $2 billion in total yearly sales, a figure Riley found “pretty impressive” and one that will mean video games will soon be “right up there with the total toys industry business” in terms of overall sales.

Handle With Care

“It’s skyrocketed,” observed Riley. “I only hope the industry can keep up with the growth and not implode. I’d hate to see a repeat of what happened with video games in the 1980s.”

Game and console makers need to be disciplined to avoid a meltdown, he said.

“There’s a lot of growth here, and with this kind of growth comes a lot of responsibility,” he said. The companies must make quality games, “and not be too quick to just kick out titles just for the buck.”

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