Video games sales defy downturn
Updated on 16 January 2009
Video games continued to sell at record levels in the US all through 2008 despite the downturn in the economy, boosted by the popularity of the Nintendo Wii and blockbuster games like "Grand Theft Auto IV", research has shown.
Still, there are some signs that the recession is nipping at the heels of video games. The priciest console, Sony's PlayStation 3, continues to lag behind its less expensive rivals, the Wii and Microsoft's Xbox 360.
According to data from market researcher NPD Group, Americans bought $21.33 billion (£14.42 billion) worth of video game systems, software and accessories last year. This is a big jump from the previous year's roughly $18 billion (£12 billion), but slightly below the $22 billion (£14.87 billion) that NPD had estimated as late as November.
"While industry growth has not continued at the blistering pace we saw during the second and third quarters, December's 9% increase over last December brings the year in 19% ahead of last year, and sets a new record for total industry sales," NPD analyst Anita Frazier said in an e-mail statement.
December marked the first time that the gaming industry's revenue topped $5 billion (£3.37 billion) in a single month, she noted. In comparison, it took all of 1997 to hit industry sales of $5.1 billion (£3.44 billion).
While the Wii, with its easy-to-use motion controller and playful titles, has been basking in the spotlight since its 2006 launch, Nintendo's portable DS was the best-selling gaming system in December, topping 3 million units. The Wii, meanwhile, sold about 2.2 million units, up roughly 5% from November's levels.
November and December are crucial months for video game companies, because they make the bulk of their money during the holidays.
Denise Kaigler, vice-president of corporate affairs at Nintendo, called December "another strong month" for the Wii. The console has been plagued by supply shortages even though Nintendo has to boosted production several times. On Thursday, the console, along with the exercise game "Wii Fit," was sold out on Best Buy's website.
In July, Nintendo upped production of the Wii by 50%, and now churns out 2.4 million consoles each month worldwide. Kaigler said Nintendo is "constantly feeding" its retailers, and getting the consoles into everyone's hands who wants one is a priority.
Total hardware sales climbed 2% in December, to $1.88 billion (£1.27 billion). In third behind the Wii and the DS was the Xbox 360, which sold 1.4 million units, up 14% from December 2007. Microsoft spokesman David Dennis said the Xbox business is meeting, and in some cases, such as its Live online service, exceeding expectations.
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