NPD Group to Be Acquired by Private Equity Firm

Research provider The NPD Group announced that private equity firm Hellman & Friedman has made a binding offer and entered into an exclusive agreement to acquire the company.

Under the deal, NPD executive chairman Tod Johnson and CEO Karyn Schoenbart will retain a minority stake in the business and continue to serve on the NPD board of directors.

The transaction is expected to close by the end of 2021, subject to the entry into the definitive sale agreement and satisfaction of its conditions.

“As a leading source of market information and advisory services for general merchandise and foodservice, NPD is committed to helping our clients and the industries we serve achieve data-driven growth for many years to come,” said Johnson in a statement. “H&F shares our focus on long-term growth and has the resources and expertise to not only continue but also accelerate NPD’s momentum and long track record of success. Both Karyn and I are delighted to have the opportunity to partner as minority investors alongside H&F as we work in close collaboration on a long-term strategic plan and transition over time to the next generation of NPD leadership.”    

“In a period of rapid change, NPD has helped guide our clients with omnichannel data, industry expertise, and analytics to help them understand unprecedented market shifts,” said Schoenbart in a statement. “It has been exciting to play an increasingly important role in the strategies of our clients by providing insight into what is happening today and what to anticipate in the future. We expect H&F to continue our tradition of client partnership and innovation with new products, data sources, and next generation platforms to make our information even more comprehensive, accessible, and actionable.”

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“Trusted by more than 2,000 customers in 19 countries, NPD is a market leader in its categories with an outstanding value proposition for customers and retailers. Tod and Karyn have led the company to great heights, and we look forward to working closely with them to build on this strong momentum,” said Philip Hammarskjold, executive chairman of H&F, in a statement.

“Rapidly evolving consumer expectations and the growth of e-commerce are accelerating the pace of change in the retail landscape. In an environment of unknowns, the ability for companies to use omnichannel analytics to measure and improve performance is more important than ever before, and NPD is extremely well positioned to provide these critical insights to its customers and retail partners,” said Blake Kleinman, partner at H&F, in a statement.

Founded in 1966, NPD is the eighth largest market research company worldwide, with operations in the Americas, Europe, and APAC, covering more than 20 industries.

NPD: August Video Games Sales Up 7%, Driven by ‘Madden NFL 22’

Another month, another feather in the cap of the burgeoning video game market, thanks to the pandemic, new-generation game consoles and Madden NFL 22.

The debut of the latest entry from the venerable NFL-themed game franchise marked the 22nd consecutive season the Electronic Arts’ franchise ranked No. 1 during its first-month of release. NPD said Madden NFL 22 already ranks as the fourth-best-selling game in 2021.

New data from The NPD Group found that sales of game hardware, software and accessories in August increased 7% to a monthly record of $4.4 billion, compared with $4.1 billion during the previous-year period. Consumer spending on games for eight months of the year approached $38 billion, up 13% from $33.5 billion a year ago.

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Driven by increased availability of Sony PlayStation 5, Microsoft’s Xbox Series X and Series S consoles, in addition to Nintendo Switch, hardware revenue rose 45% to $329 million from $226.8 million. Console revenue is up 49% through eight months to $3 billion from $2 billion.

Game sales increased 5% to $3.87 billion from $3.6 billion last year, while accessories revenue remained flat in the month at $164 million, but up 12% through eight months at $1.6 billion, from $1.42 billion in 2020. The top-selling accessory was Xbox Elite Series 2 Wireless Controller.

Through August, game sales are up 11% to $33.33 billion, from $30 billion a year ago. Nintendo continues to lead in unit sales, while PS5 dominates in dollars.

NPD: Pandemic-Driven Record Movie and TV Viewership Continues

Record time spent watching movies and TV shows in the United States continues, while consumer spending on entertainment declines.

New data from The NPD Group found time spent watching TV shows and movies in the first half of the year rose 4% compared with the previous-year period. Screen entertainment spending declined 1%.

Viewing hours from January through June 30 accounted for 30% of the time U.S. consumers spent entertaining themselves. However, there were large time differences between the first quarter and the second, since Q1 compared with the prior-year, pre-pandemic period, while the Q2 contrasted with record year-ago stay-at-home viewership levels.

NPD said watching movies in movie theaters remained significantly below pre-pandemic levels. In part, entertainment time was diverted to in-home viewing through premium releases and the proliferation of Netflix and other SVOD services. However, the reduced number of theatrical releases limited the flow of retail releases through other video distribution channels.

The Port Washington, N.Y.-based research group suggests that as consumers spend more time going out to eat, travel, and other experiential activities, SVOD engagement has pulled back. Time spent on experiences has grown 104% this year compared with last year.

Free streaming video is a growing supplement to viewers’ cost of SVOD services. The digital transaction business experienced gains in 2020 and is now positioned to retain viewer engagement. These gains are happening, in part, because of shorter theatrical windows and the release of premium VOD offerings. Meanwhile, traditional content viewing on cable, satellite TV, and packaged media continues to migrate to streaming.

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“Looking ahead, the mandate for the industry is to retain viewer engagement and win the battle for share of viewers’ time,” John Buffone, connected intelligence and media entertainment industry analyst for NPD, said in a statement. “As consumers migrate back to experiential activities, the available time to engage in watching TV shows and movies will naturally decline.”

NPD: July Video Game Sales Increased 10% to Record $4.6 Billion

Following a brief downturn in April, sales of video games, hardware and accessories rose 10% in July to a record $4.6 billion, compared with revenue of $4.18 billion in July 2020 at the height of the pandemic, according to new data from The NPD Group.

Spurred by greater availability of new-generation consoles from Microsoft and Sony, hardware sales skyrocketed 98% to $323 million — the best July sales tally since 2008. Hardware sales topped $161 million in the previous-year period. Year-to-date spending on consoles through July is up 50% to $2.7 billion from $1.81 billion in 2020.

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Game software sales rose 6% to $4 billion, from $3.7 billion in 2020. Year-to-date revenue rose 12% to $29.45 billion, from $26.29 last year. The top-selling game in July was Nintendo’s The Legend of Zelda: Skyward Sword, followed by perennial chart topper Call of Duty: Black Ops Cold War from Activision.

Total consumer spending on gaming for seven months reached $33.5 billion, up 14% from $29.38 billion during the same period last year.

NPD: Strong First-Half Sales Projected to Increase 7% for U.S. Consumer Electronics Industry in 2021

The pandemic helped drive consumer electronics sales in 2020, and that momentum is continuing in 2021, according to new data from The NPD Group. As a result of strong sales and rising retail prices in the first six months of the year, The NPD Group said U.S. consumer technology revenue in 2021 is expected to surpass 2020 totals by 7%, while unit sales for the year will see a 1% decline.

Port Washington, N.Y.-based NPD estimates sales for 2021 will reach more than $113 billion, up 4% increase from earlier estimates. In 2022 and 2023, NPD expects revenue to be down year over year 7% and 4%, respectively, and unit sales will see a 6% and 5% decline.

“The higher than expected [average selling prices] we are seeing in the market today can be attributed to increased shipping costs, component shortages, consumer readiness to trade-up to a higher cost product to meet their needs, and lack of promotional activity,” Stephen Baker, VP and industry advisor, said in a statement.

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Baker said the aforementioned factors have driven total revenue projections up, but higher prices would inevitably lead to lower consumer demand, resulting in unit sales declines in categories such as TVs, networking devices, and printers in the back half of the year.

“Following the historically high sales in 2020 and 2021, we are anticipating near-term declines with a slow climb back to normalcy by the end of 2023,” he said.

The current third quarter is forecasted to be the most challenging revenue quarter for the CE business since the pandemic began due to difficult comps to Q3 2020. But NPD’s forecast predicts a temporary return to revenue growth in Q4 2021, up 2% year over year, despite a 5% decline in unit sales, again driven by pricing and product availability. This is noteworthy revenue growth given the strong CE sales recorded in Q4 2020.

“Revenue growth in Q4 will be driven by higher prices in the industry’s most popular holiday categories like big-screen TVs, PCs, gaming and audio,” said Ben Arnold, executive director and tech industry analyst at NPD. “As consumers trade-up to better, more feature-laden technology products, they will also have to contend with fewer and shallower promotions.”

Video Games Surprise: Half-Year Sales Up Over 2020 Boom Year

The video game industry continues to prosper through six months of 2021 after setting revenue records during pandemic 2020.

According to the Q2 2021 Games Market Dynamics: U.S. report from The NPD Group, overall total consumer spending on video gaming in the U.S. totaled $14 billion in the second quarter of 2021 (April to June), an increase of 2% compared to Q2 2020.

Gains were seen across PC, cloud and non-console VR content, mobile and subscription spending, as well as hardware. Console content and accessories experienced declines.

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Overall content spending in Q2 reached $12.57 billion, an increase of 2%. Subscription content was the only content segment with double-digit percentage gains compared with Q2 2020. Hardware posted a 12% increase, while accessories declined 11%.

Among the best-selling and most played games across all platforms in the second quarter were Among Us, Call of Duty: Black Ops Cold War, Call of Duty: Warzone, Candy Crush Saga, Candy Crush Soda Saga, Clash of Clans, Coin Master, Fortnite, Garena Free Fire, Genshin Impact, Grand Theft Auto V, Homescapes, Mario Kart 8, Mass Effect: Legendary Edition, Minecraft, MLB The Show 21, New Pokémon Snap, Pokémon Go, PUBG Mobile, Resident Evil: Village and Roblox.

“Despite changing pandemic conditions across the country, video games spending remained strong in the second quarter of 2021,” Mat Piscatella, games industry analyst at The NPD Group, said in a statement. “A year ago, in the second quarter of 2020, consumer spending on video games increased a remarkable 47% compared to the same period in 2019. Consumer spending has not only maintained the elevated levels reached a year ago, but exceeded them in key areas such as hardware, mobile and subscription spending. Video games have become a bigger part of consumers’ entertainment and social lives, factors that lend confidence to continued growth for the industry.”

Data from Sensor Tower shows U.S. consumer spending in mobile games during the second quarter increased 5% from Q2 2020. Multiplayer gaming on mobile continues to be a standout theme, with seven of top 10 earning titles focused on real-time online play, up from five in Q2 2020.

“Spending in mobile games remains elevated, showing signs of a continuing lift from the surge of new players who flocked to the category beginning in the second quarter of 2020,” said Randy Nelson, head of mobile insights at Sensor Tower. “Thus far, we see no indication that spending or usage has diminished as consumers have begun their return to life in a post-vaccine world.”

NPD: May Video Game Revenue Growth Returns, Up 3%

Video game revenue returned to growth in May, as sales of game systems, titles and accessories inched up 3% to $4.45 billion, compared with $4.32 billion in the previous-year period, according to new data from The NPD Group.

In April, video game revenue fell for the first time in 14 months.

In May, the surge was led by hardware, up 5% to $244 million, from $232.4 million. The category was again spearheaded by Nintendo Switch, with new generation consoles from Sony PlayStation and Microsoft Xbox following.

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Sales of packaged media and digital games increased 3% to $4.06 billion, from $3.94 billion a year earlier. Accessories fell 8% to $142 million, compared with $154.3 million a year ago.

Industry year-to-date revenue is up 17% to $24.02 billion, from $20.52 billion in 2020. Hardware sales are up 36% to $1.94 billion, from $1.42 billion. Accessory sales ballooned 17% to $1.03 billion, from $880.3 million. Games are up 15% to $21.05 billion, compared with $18.3 billion in 2020.

 

NPD: Online Represented 61% of Consumer Electronics Sales During Pandemic

Accelerated by temporary store closures and consumer hesitancy to shop in-store during the pandemic, online U.S. consumer technology hardware revenue share rose to 61% during the 12 months through March — up from 48% in the previous-year period, according to new data from The NPD Group.

The Port Washington, N.Y.-based research company said online revenue grew 62%, up more than $36 billion. Online technology revenue share peaked at 68% in Q2 2020, during the height of lockdowns, and despite declining since then, remained above the long-term trend at 57% in Q1 2021. This was 7% above Q1 2020, and 14% above the pre-pandemic share in Q1 2019.

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Notebooks, TVs, tablets and headphones made up 43% of in-store sales, the same as the previous 12 months. Online sales of those categories saw a revenue share increase from 33% to 37%. NPD said online sales of notebooks, tablets, and headphones saw a dramatic shift from in-store, resulting in higher category e-commerce sales than in-store. TVs were the outlier, with the majority of revenue remaining in-store despite lockdowns and growth in online sales.

“While technology hardware sales have moved online at a more rapid pace than other general merchandise categories, the acceleration of this change, and the passing of the 50% milestone as a consequence of the pandemic, represents an important shift,” Stephen Baker, VP and industry advisor for the NPD Group, said in a statement.

The analyst said there remains substantial opportunity for in-store retailing and growth in buy-online-pick-up-in-store activities that need to be fulfilled by retailers at the local level.

“As evidenced by the continued dominance of TV buying in-store, physical presence benefits categories where product features cannot be demonstrated as effectively online,” Baker said in a statement.

While the growth in online sales presents challenges to physical retailers, much of the online revenue increase was actually a result of retailers selling through online channels or using their stores for e-commerce transactions.

In-store pick-ups accounted for 12% of all online consumer tech revenue through March, an increase of two percentage points from the previous period. In fact, NPD reported that when combining in-store pick-up transactions and normal product deliveries, sellers with a retail store presence saw their overall share of online sales increase 10% during the pandemic.

NPD: Pandemic Purchases of Televisions Cooling

As a result of the pandemic, U.S. television sales jumped in 2020, but as the crisis subsided sales growth slowed in the first quarter of 2021, according to the NPD Group’s Retail Tracking Service.

Unit sales across all models were up 20% in 2020 compared with 2019, according to the NPD.

Sales of TVs were still up in the first quarter (ended March 31), but increased at a slower pace than in 2020. U.S. TV unit sales grew in the mid-teens. Sales will see tougher comps in Q2 (ending June 30) compared with 2020 when pandemic buying took hold, according to NPD.

Fueled by stimulus checks and improving economic outlook, NPD said the mix TV models and cost increases overall saw average selling prices at record high levels.

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Stephen Baker, technology industry advisor at NPD, said long-term demand for TVs likely improved as a result of the pandemic, with a much higher consumer value on larger screens, streaming quality, and the availability of familiar and consistent interfaces.

“Expect pricing to become a hurdle,” Baker wrote in a note. “While consumers expect better big screen TVs, the era of high-volume sales above $1,000 has passed.”

Baker said model mix remains key. Brands and retailers need a robust sales mix to capture a fair share of premium TV sales, while maintaining volumes necessary to create operating and cost leverage.

NPD: April Video Game Revenue Dips Compared With 2020

Video game sales in April dipped 2% to $4.64 billion, from $4.73 billion in the previous-year period, according to new data from The NPD Group. The tally marked the first decline in 14 months, reflecting the year-over-year surge in household gaming at the start of the pandemic. The April 2020 total was up 73% from $2.73 billion in 2019.

For the first time since the launch of next-generation consoles from Sony PlayStation and Microsoft Xbox, hardware sales dropped 30% to $296 million, from $371.4 million a year ago. Through four months of 2021, hardware sales are up 42% from the same period in 2020. Accessory sales fell 23% to $168 million, from $218.1 million. Software sales spiked up 2% to $4.18 billion, from $4.26 billion.

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As expected with the start of the Major League Baseball season, the top-selling game in April was the launch of Sony Interactive Entertainment’s MLB: The Show 21, knocking off perennial chart topper, Activision’s Call of Duty: Black Ops Cold War. Rounding out the podium was Nintendo’s New Pokémon Snap.