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Monday January 27, 2003

The NPD Group Reports Annual 2002 U.S. Video Game Sales Break Record

According to the latest sales figures from The NPD Group, a leading market information company, total U.S. retail sales of video game hardware, software and accessories grew 10 percent in 2002 over 2001.

The video game industry generated $10.3 billion in record-breaking sales, surpassing the previous record high of $9.4 billion in 2001.

The category of video game software, consisting of both console and portable software, experienced sales gains of 21 percent in dollar volume and sold 15 percent more units in 2002 than in 2001. The healthy increase in sales was driven by the success of key franchises such as: Grand Theft Auto: Vice City, Madden NFL 2003, Super Mario Sunshine, Spider-Man: The Movie, Halo and Tom Clancy's Splinter Cell.

Annual 2002 video game hardware sales showed a slight decline of four percent in revenue, earning $3.5 billion versus $3.7 billion in 2001. However, the category did post a 10 percent increase in unit volume. The decline in dollar and increase in unit volume were attributed to price reductions of all hardware systems. Prices of GameBoy Advance, GameCube, Sony Playstation 2, and Xbox dropped to almost one-third of their original price in first half 2002. The new price points opened the doors to the mass market, which in turn led to the dramatic increase in unit sales.

In 2002, the category of console and portable accessories posted a nine percent increase in dollar volume versus 2001. Console accessories include items such as DVD remotes and Internet adapters that lend themselves to the whole multi-media concept. These particular accessories were very important drivers to the video game industry in 2002, as they represented 18 percent of the next generation accessory dollars in August through December 2002. Online playable games represented 15 percent of next generation software dollars in the same time period. This new format will become much more important for the duration of the next generation life cycle and beyond.

    "In 2003, the video game industry should expect unit volume growth to outpace dollar volume growth in the hardware category," said Richard Ow, senior account executive with The NPD Group. "Dollar volume will struggle for continued growth throughout 2003. The majority of the growth will come primarily from software sales, capitalizing on the hardware sold to date. The full power of the current generation of hardware is still unrealized. There is a barrage of new game software launches that will appeal widely to new video gamers, both old and young, expanding the software-to-hardware tie ratios of the previous generation," added Ow.

    Top 10 Best Selling Video Game Titles, Ranked by Total U.S. Units
    Annual 2002


Rank   Platform / Title                Publisher         Release   ARP
                                                          Date

 1  PS2: Grand Theft Auto: Vice City Rockstar Games      Oct. '02  $49
 2  PS2: Grand Theft Auto 3          Rockstar Games      Oct. '01  $50
 3  PS2: Madden NFL 2003             Electronic Arts     Aug. '02  $49
 4  GBA: Super Mario Advance 2       Nintendo of America Feb '02   $29
 5  PS2: Gran Turismo 3: A-Spec      Sony Computer Ent.  July '01  $24
 6  PS2: Medal Honor Frontline       Electronic Arts     May '02   $50
 7  PS2: Spider-Man: The Movie       Activision          Apr. '02  $45
 8  PS2: Kingdom Hearts              Square EA           Sept. '02 $49
 9  XBX: Halo                        Microsoft           Nov. '01  $48
 10 GCN: Super Mario Sunshine        Nintendo of America Aug. '02  $49

    Source: The NPD Group/NPD Funworld

    About The NPD Group, Inc.

    The NPD Group, Inc. (NPD) is a global market information company that measures product movement and consumer behavior across a broad range of industries -- apparel, automotive products, consumer electronics, cosmetics and fragrances, food, foodservice, footwear, housewares, information technology, interactive entertainment, toys and music. NPD's clients, many in the Fortune 500, use this insight to uncover market opportunities, strengthen channel relationships and benchmark industry performance. Since 1967, NPD has introduced numerous industry firsts, most recently combining and calibrating information from consumer panels and point-of-sale tracking via its flagship services, the NPD Worlds. The firm has offices and affiliations in 60 countries. For more information on The NPD Group, visit http://www.npd.com.