Videogames lift 43% in 2007
Industry reaches record sales of $17.94 billion
By Susanne Ault -- Video Business, 1/17/2008
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JAN. 17 | Driven by consumer demand for advanced consoles, videogame software and hardware achieved record sales of $17.94 billion in 2007, according to the NPD Group.
That haul represents a 43% jump over 2006.
Console hardware enjoyed the biggest gain of all of NPD’s tracked game categories, climbing 73% to $5.12 billion, on strong sales of new consoles Nintendo Wii and PlayStation 3, according to NPD. Total hardware sales, including portable devices, rose 54% to $7.04 billion.
Overall software sales lifted 34% to $8.64 billion. This category was boosted by the year’s best-performing title, Halo 3, which generated $4.82 million. When launched in September, this Xbox 360 title marked the strongest debut for a videogame yet.
Guitar Hero, which also unleashed its third installment in 2007, was ranked as the year’s strongest franchise, raking in $820 million at U.S. retail in 2007.
The Nintendo Wii took the crown for top-selling console, with 6.29 million units sold in 2007. Runners-up were the Xbox 360, selling 4.62 million units; PlayStation 2, 3.97 million units; and PlayStation 3, 2.56 million units. Among the handhelds, Nintendo DS proved victorious, moving 8.5 million units, trumping the PlayStation Portable’s sales of 3.82 million units.
“While hardware sales realized the greatest percentage growth over 2006 due to the closely scrutinized console hardware transition, each category under the videogames industry umbrella reached their own personal best in terms of annual sales,” NPD analyst Anita Frazier said. “While I wouldn’t count on similar growth in 2008, I would expect to see 2008 increase over 2007, with more growth (proportionately) coming from software sales. While we will continue to see strong hardware sales, particularly if prices come down again, the spotlight now turns from hardware to software.”
November’s introduction of a cheaper $399 PS3 is cited as significantly boosting its performance in the last weeks of the year. A less expensive version of the Xbox 360 also launched at retail in recent weeks.
Gaming’s 2007 resounding success has been given as an explanation for fall-offs in consumer spending in other competing entertainment categories, such as DVD.