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NPD Group Releases Industry October Total

The game industry trackers, NPD Group, released its final October sales numbers, including both hardware and software. The industry did continue its long-standing run of year-over-year improvement in the software department, but it was a lot closer this time around.

Certain analsysts like Pacific Crest Securities' Evan Wilson and Lazard Capital Markets' Colin Sebastian stepped up and predicted a sharp sales increase for October, but the expected spike didn't occur. Last month, U.S. software sales rang up $369 million, which is only a mere $3 million increase (less than 1%) over October 2005's $366 million take.

However, NPD analyst Anita Frazier pointed out that the actual number of games sold rose by 4%, even though the average retail price of those games fell about $1 from 2005. This could be due to the success of lower-priced handheld and PS2 games, which have been going for $10 less than they initially cost. Frazier also mentioned that these factors are offsetting the $60 price of most new Xbox 360 titles.

Domestic hardware sales enjoyed more success; NPD reports an October total of $207 million, a healthy 56% leap over last year's $133 million for October. When you add in some solid accessory sales, the industry's total take for October 2006 was $642 million, which is actually up more than 15% over last year's $556 million.

"A lot of people thought that consumers would be holding their dollars in anticipation of a pricey hardware purchase, and I think that the results show that this is anything but true," Frazier said. "Entertainment is consumable by nature, and I never thought consumers would put off being entertained in the present for the promise of future gratification. It's just not a common trait of entertainment consumers. I think we've learned a lot with this transition--that if you build the right content, consumers will continue to buy it and transitions don't necessarily have to be as painful as previously thought."

11/10/2006 Ben Dutka

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