2006: Record Year for Game Industry

By NewsFactor Network | January 15, 2007

Brisk holiday sales in December finished a record year for the video game industry, according to recently released figures from market research firm NPD Group.

U.S. sales of software, hardware, and accessories were up 19 percent in 2006, the firm noted, ringing up $12.5 billion in sales.

Although some growth came from the new systems unveiled by Sony and Nintendo, older systems and games showed strong sales, a rosy result for the game industry overall, and setting it up well for the year ahead.

Sales Surge

According to NPD, the greatest number of consoles sold in December were Nintendo’s systems, followed by those made by Sony and Microsoft.

Nintendo’s DS sold 1.6 million units during the month, bringing its total units sold since 2004 up to 9.2 million. Sony’s PlayStation 2 came in second, with 1.4 million units sold during December, in part because of scarcity of its successor, the PlayStation 3, the NPD group posited.

Nintendo’s distinctive Wii, the follow-up to the Game Cube, has sold 1.1 million units since its late November release.

Game sales are equally robust, with 2006 sales coming to $1.7 billion, an increase of about 5 percent. Sales of accessories like memory cards and controllers rose 47 percent over the past year.

Software sales would have been even more zesty if it were not for industry slugger EA Games posting a decline in retail game revenues, wrote Prudential analyst John McPeake in a note to investors. He stated that if EA were removed from the overall gaming stats, the software industry expanded almost 10 percent.

Innovation Station

The rising popularity of gaming can be traced to several factors, said Jupiter Research analyst Michael Gartenberg. Most notably, games have attracted a wider audience in recent years, thanks to aggressive efforts to make the consoles appeal to adults as much as kids and teenagers.

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