NPD: April Video Game Revenue Fell 8% Despite Console Sale Gains

Sales of physical and digital video games, consoles and accessories declined 8% in April to $4.34 billion, from $4.71 billion during the previous-year period, according to new data from The NPD Group. The drop was less than March’s plummet of 15%.

In a “switch,” hardware sales, driven by reduced supply issues for Sony’s PlayStation 5, Microsoft’s Xbox Series X and Series S, and the Nintendo Switch consoles, hardware revenue in April increased 16% to $343 million, from $295.6 million a year ago. The increase helped reduce year-to-date hardware sales decline to 9% to $1.54 billion, from $1.69 billion during the previous-year period.

Accessories revenue fell 10% to $151 million, from $167.7 million, which contributed to a 15% year-to-date drop to $743 million, from $874 million a year earlier.

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Another blow: Video game software sales dropped 10% to $3.84 million, from $4.27 billion a year ago. The No. 1 selling title was Lego Star Wars: The Skywalker Saga (Warner Bros. Discovery), which knocked Elden Ring (FromSoftware/Bandai Namco Entertainment) from atop the sales chart after two months.

NPD: First-Quarter 2022 U.S. Consumer Spending on Video Games Decreased 8% to $13.9 Billion

Total consumer spending on video games in the U.S. reached $13.9 billion in the first quarter, ended March 31, a decline of 8% when compared to $15.1 billion in the previous-year period, according to new data from The NPD Group.

The Port Washington, N.Y.-based research firm said losses were seen across console and portable content, PC, cloud and non-console VR content, mobile content, hardware, and accessories. Mobile contributed most to the decline. Data from Sensor Tower shows U.S. consumer spending in mobile games during the first quarter fell 10% from Q1 2021.

“We witnessed an uncharacteristic quarter-over-quarter decline in mobile game spending by U.S. players coming out of 2021,” Randy Nelson, head of mobile insights at Sensor Tower, said in a statement.

Nelson cautioned that while the downturn in mobile game revenue shouldn’t be confused with a loss in consumer interest.

“Usage of the most popular titles continues to grow, with their combined active users up from the first quarter of last year as well from the first quarter of 2019,” Nelson said. “Players are clearly still engaging with favorite games on mobile but have a broader array of alternative entertainment options open to them compared to a year ago as life in the U.S. normalizes.”

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NPD said overall content spending in Q1 reached $12.13 billion, a 7% decrease over Q1 2021. Subscription content was the only segment to post positive gains. Hardware and accessories declined 15% and 16%, respectively.

Among the best-selling and most played games across all platforms in the first quarter were Animal Crossing: New Horizons, Call of Duty: Vanguard, Call of Duty: Warzone, Candy Crush Saga, Candy Crush Soda Saga, Coin Master, Elden Ring, Fortnite, Grand Theft Auto V, Horizon: Forbidden West, Madden NFL 22, Mario Kart 8, Mario Party Superstars, Minecraft, NBA 2K22, Pokémon GO, Pokémon Legends: Arceus, Roblox, The Sims 4 and WWE 2K22.

“Despite declines when compared to the first quarter of 2021, industry spending and engagement remained significantly higher than pre-pandemic levels,” said Mat Piscatella, games industry analyst at The NPD Group. “Several factors influenced the changes in spending on video games seen so far this year. These included continued supply constraints on new console hardware, a comparable quarter from last year that included government COVID-19 stimulus checks for individuals, and the return of experiential spending opportunities that had been depressed last year, among others.”

Video game hardware unit sales were led by Nintendo Switch, while Xbox hardware generated the highest dollar sales in the first quarter, a 92% increase when compared Q1 2021.

NPD: Video Game Sales Decline for Fifth Consecutive Month

Sales of physical and digital video games, hardware and accessories declined in March for the fifth consecutive month, according to new data from The NPD Group. The Port Washington, N.Y.-based research firm said total sales dropped 15% to $4.85 billion

Overall sales slid 15% to $4.853 billion, from $5.7 billion in the previous-year period. The decline is more than double February’s 6% drop, preceded by a 2% dip in January.

Hardware revenue plummeted 24% to $515 million, from $677 million last year. For the first quarter, ended March 31, total hardware revenue declined 15%, $1.2 billion from $1.4 billion. Microsoft’s Xbox Series was the best-selling platform, while the Nintendo Switch again topped all devices in unit sales.

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Accessory sales dropped 23% to $227 million from almost $295 million. In Q1, accessories tallied $592 million, down 16% from almost $705 million. The best-selling accessory remained the Xbox Elite Series 2 Wireless Controller.

Game sales fell 13% to $4.11 billion, from $4.72 billion. For the first three months, revenue dropped 7% to $13.9 billion, from $14.94 billion. The top-selling title was Bandai’s Elden Ring, which is now the No. 2 best-selling title over the past 12 months behind Activision’s Call of Duty: Vanguard.

NPD: U.S. TV Buyers More Motivated by Screen Size and Picture Quality Than Price

Size matters when it comes to the television screen size.

Over the past two years, the average size of installed TVs in U.S. households has increased three inches to 47.5-inches, according to new data from The NPD Group. In the five years prior to the pandemic, screens grew one inch per year. With home entertainment top of mind, consumers purchasing replacement TVs put more importance on screen size and picture quality than ever before.

In the February 2022 “retail tracking service and the quarterly device tracking survey” with more than 5,100 participants, 44% of survey respondents said they bought a new TV because they wanted a larger screen — an increase of 7% from the February 2020 survey. Another 38% purchased for better picture quality — up 5%. The number of respondents buying because of pricing was unchanged from February 2020 survey at 23%.

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“Pandemic-fueled TV sales growth drove consumers to replace TVs in order to get larger screens and better picture quality resulting in a newer and bigger installed TV base,” John Buffone, executive director, industry analyst for NPD, said in a statement. “With consumers spending more time at home, entertainment became a high priority, and despite higher prices, screen size and quality remain top motivators.”

In fact, consumers are replacing TVs faster than before the pandemic began. In February 2020, the average age of a replaced TV was 6.8 years, by February 2022 that dropped to 6.4 years. The replacement TVs being purchased are bigger and have higher picture quality than pre-pandemic as well. In February 2022, the average replacement TV was 53.6-inches, up from 49.4-inches in 2020, and nearly three-quarters (72%) of replacement TV purchases were 4K UHD, up from 62% in 2020.

NPD said sales of premium TV units (priced $1,000+) have reached a five-year high, representing 9% of total sales in the U.S. When considering screen size alone, 65-inch and larger TV unit sales are expected to grow from less than a quarter of the market in 2020 to more than one-third by 2024, based on NPD’s forecast.

“The strong gains in consumers reporting picture quality as a motivator for purchase are in part driving the sales growth we are seeing in premium and big screen TVs,” said Paul Gagnon, VP, industry advisor for NPD. “When consumers are motivated to purchase better quality TVs, they are also typically less price sensitive and place importance on larger screen sizes. While initially fueled by the pandemic, we expect this segment of the market will continue to perform well, as consumers have placed an increased value on TVs and home entertainment that will continue into the future.”

NPD Hires Industry Vet Paul Gagnon as VP of Consumer Technology Unit

The NPD Group April 13 named longtime industry veteran Paul Gagnon as VP, industry advisor for the research firm’s consumer technology business. In this role, Gagnon will track the CE industry and anticipate market trends to help manufacturers and retailers make data-driven business decisions for the present and future.

Paul Gagnon

With 20 years in the industry, Gagnon is a well-known analyst with expertise in many aspects of the CE industry, from supply chains and core technologies to consumer CE product adoption. He is knowledgeable about display technologies and their application in CE, as well as the overall intersection of CE technology, devices, and applications.

“The role technology plays in our lives is forever evolving as we adopt new smart technologies for our homes, explore new entertainment hardware, and adjust to a perhaps permanent hybrid work schedule,” Ian Hamilton, president of NPD’s Technology sector, said in a statement. “Paul is a welcome addition to our technology team as he brings a wealth of CE knowledge and will provide critical insights to NPD’s clients, who rely on our data to make real-time business decisions.”

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Prior to joining The NPD Group, Gagnon was senior research director at Omdia, formerly IHS Markit Technology. He also previously led the TV research team at NPD DisplaySearch, was a senior marketing analyst at Hitachi, and started his career on the retail side of the industry at Circuit City.

Analytics Firms The NPD Group, Information Resources Merge

The NPD Group, a provider of market information and advisory services in more than 20 industries, including home entertainment and video games, is merging with Information Resources. The combination aims to create a global technology, analytics and data provider that offers clients a view of retail and consumption trends. The transaction, which is subject to customary closing conditions, is expected be completed in the second half of 2022. Terms of the agreement were not disclosed.

Kirk Perry, CEO of IRI, will be the chief executive officer of the combined companies, with NPD CEO Karyn Schoenbart joining the board of the combined companies. NPD executive chairman Tod Johnson will be chairman of the new board. Jeff Ansell, current chairman of IRI’s board, will continue on the combined company’s board as well. Johnson and Schoenbart will continue to lead NPD until closing and will remain investors in the combined company.

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“This combination is a win for IRI, NPD, our clients and our teams as we bring together two industry leaders to offer a total store view,” Perry said in a statement. “We look forward to joining forces with the NPD team, which brings expertise in parts of the store that IRI does not cover today. As the global retail landscape continues to evolve, IRI and NPD will have innovative technology, analytics, data resources, talent and geographic reach to best support the growth of the world’s leading brands and retailers.”

NPD CEO Karyn Schoenbart added, “We are excited about the prospect of combining our companies to give clients the tools and information they need to succeed amid changing consumer behavior. Both NPD and IRI share similar client-focused, innovative and collaborative cultures, making this combination a natural fit.”

H&F, a global private equity firm, will acquire a majority stake in IRI and merge IRI with H&F portfolio company NPD. H&F will lead an ownership group consisting of existing long-term IRI investors Vestar Capital Partners and New Mountain Capital, which will both retain significant investments in the combined company.

Evercore, Goldman Sachs & Co. and Guggenheim Securities are serving as financial advisors to IRI, and Kirkland & Ellis is serving as legal counsel. Jefferies Group is serving as exclusive financial advisor to NPD and H&F, and Simpson Thacher & Bartlett is serving as legal counsel. Kramer Levin is serving as legal counsel to Johnson and Schoenbart.

NPD: Video Game Industry Marks Fourth Consecutive Monthly Revenue Decline

Sales of video games, consoles and accessories fell 6% in February to $4.38 billion, compared with revenue of $4.65 billion during February 2021, according to new data from The NPD Group. The decline marks the fourth consecutive monthly drop for the video game industry, which has seen the market cool slightly from record-setting revenue during the pandemic era (2020-21) when many consumers were forced to stay at home due to government mandates.

The February decline was the largest following a 2% dip in January and 1% slip in December 2021.

NPD said hardware sales, which include new-generation game consoles, dropped 27% to $295 million from $404 million as supplies issues continue to hamper in-store availability.

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The Nintendo Switch continues to be the best-selling platform in terms of unit sales and revenue, followed by Microsoft Xbox Series S/X consoles and Sony’s PlayStation 5 — the latter the top-selling console in 2022 based on revenue.

Accessory sales fell 7% to $180 million from $193.5 million last year, driven by sales of the Xbox Elite Series 2 Wireless Controller. Games sales, which include packaged media and digital, fell 4% to $3.91 billion from $4.07 billion last year.

Top-selling game in February was Elden Ring from Bandai Namco Entertainment, followed by Sony’s Horizon II: Forbidden West and Nintendo’s Pokemon Legends: Arceus.

NPD: Only 50% of Homes in Continental U.S. Get True Broadband Access

A new “Broadband America” report from The NPD Group reveals that only 50% of homes in the continental U.S. have true broadband speed of 25Mbps download or higher despite the growing reliance on connected technology.

In fact, 34% of homes receive internet access at speeds of less than 5Mbps, including 15% that do not have any internet access, according to NPD.

Vermont, West Virginia, New Mexico and Mississippi are among the least-connected states, while New Jersey, Rhode Island, Maryland and California are among the most connected. In Vermont only 24% of homes receive broadband speeds, while in New Jersey 65% of homes do.

“The so-called digital divide is a result of many factors including availability of suitable internet services and the affordability of services that are available in more rural parts of America,” Eddie Hold, president of NPD Connected Intelligence, said in a statement. “But there is potential for this situation to improve relatively quickly, as a result of the American Rescue Plan Act and the Infrastructure Investment and Jobs Act, which are providing key subsidies for deploying faster internet services, as well as funding the Affordable Connectivity Program which provides subsidized internet service to lower-income homes.”

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According to the NPD’s “Rural America” report, more-rural and less-connected areas of the United States have far lower ownership levels of connected devices, as well as a higher level of price sensitivity for technology products ranging from TVs to streaming media players and beyond. In fact, while TV unit sales are roughly the same across rural and non-rural areas, the average price is 40% lower in rural areas. When looking at streaming media players, unit sales are nearly 60% lower in rural areas.

“The lack of higher-speed internet limits the opportunity for newer devices and services, as customers do not have the connectivity needed to generate a satisfactory experience,” Hold noted. “That has a ripple-on effect for consumer technology, limiting the need for larger, smarter TVs, streaming devices, or even tablets and newer PCs.”

January Video Game Sales Fall for Third-Straight Month

Sales of new video game titles dipped in January — the third-consecutive monthly decline compared with the previous-year period.

Total sales last month fell 2% to $4.68 billion, from $4.77 billion a year earlier, according to data from The NPD Group. Software sales dropped 4% to $4.1 billion, from $4.27 billion. Accessories declined 15% to $185 million, from $217.6 million a year ago. Hardware sales climbed 22% to $390 million, from $319.6 million a year ago — driven by ongoing sales of the Nintendo Switch, Sony PlayStation 5 and Microsoft Xbox Series consoles.

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The top-selling game in January included new Pokémon release Pokémon Legends: Arceus, which supplanted Call of Duty: Vanguard as the month’s best seller. Other top sellers included Monster Hunter: Rise, God of War, and Madden NFL 22.

NPD: Consumer Spending on PC Gaming in U.S. Increased 25% in 2021

Total consumer spending on PC gaming hardware and accessories reached $5.74 billion in 2021, an increase of 25% over 2020, according to new data from The NPD Group. This follows a 62% revenue increase in 2020 vs. 2019.

Year-over-year revenue growth in PC gaming hardware and accessory categories was led by desktop computers, notebook computers and PC microphones, increasing 38%, 29% and 25%, respectively. PC microphones, monitors, and notebook computers experienced the highest unit volume growth, increasing 27%, 17% and 16%, respectively.

According to NPD’s Future of Technology forecast, 2022 PC gaming hardware and accessory revenue will see a 4% decline, a result of tremendously high volumes for the previous two years.

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Digital PC content, which includes cloud and non-console VR content, also saw sales gains, increasing 5% to $7.9 billion. Time spent playing PC games was strong as well. According to NPD’s Evolution of Entertainment 2021 report, PC game players averaged 7.7 hours played per week in 2021, up from 6.7 hours in 2020.

“PC gaming continues to offer a wide variety of content, across numerous genres, coming from developers around the world,” Mat Piscatella, games industry analyst at The NPD Group, said in a statement. “It remains the home of game innovation, while providing players myriad ways to engage with the medium. In 2021, the PC platform generated record consumer spending and engagement, further proving that the oldest game platform may indeed still be the industry’s best.”