US video game sales soar to record 17.9 billion dollars
by Glenn Chapman
Fri Jan 18, 8:17 PM ET
US video game industry sales rocketed to a record high 17.9 billion dollars in 2007, with Nintendo reigning as champion of the console battle with Microsoft and Sony, according to research group NPD.
US sales of video game consoles, software and accessories rose "an astounding" 43 percent, with each category reaching a new "personal best," NPD reported.
Nintendo DS handheld game devices and Wii consoles were the top hardware sellers, ranking first and second respectively. The Japanese company's gadgets accounted for 52 percent of the video game devices sold in the United States.
"Nintendo has certainly been the belle of the hardware ball," NPD analyst Anita Frazier told AFP on Friday.
"The DS has driven portable gaming to a new level, and for the second year in a row, the DS has been the top-selling hardware platform."
Nearly 8.5 million Nintendo DS devices were sold in the United States last year, while buyers snatched up approximately 6.3 million Wii game consoles.
"By the end of 2007 we were sold out of virtually all hardware, and much of our stock of software and accessories was sold out as well," said Cammie Dunaway, the executive vice president of marketing at Nintendo of America.
"And that momentum continues here in the early weeks of 2008."
Sony sold 3.97 million PS2 consoles and 2.56 million of its newer PS3 consoles in the United States in 2007, NPD reported.
Microsoft last year sold 4.62 million Xbox 360 consoles, which debuted in the market in November of 2005, a year before Wii and PS3 were released.
Video game hardware sales were boosted by the fact that it was the first full year that the Wii and PS3 consoles were on the market.
Daunting prices on PS3 consoles and the speed with which Wii models vanished from store shelves made Sony's previous-generation PlayStation 2 a "fall-back" for buyers, according to NPD.
Sony trimmed PS3 prices last year in the face of floundering sales blamed on its high cost and a dearth of coveted games for the consoles.
"Both the PS3 and the Xbox 360 realized strong month-over-month hardware sales increases," Frazier said.
Frazier predicts that the video game industry will continue to flourish in the United States this year, but not at the stellar rate of growth seen in 2007.
"I expect to see 2008 increase over 2007, with more growth, proportionately, coming from software sales," Frazier said, adding that the competing consoles feature online game services that make money from subscriptions and downloads.
"While we will continue to see strong hardware sales, particularly if prices come down again, the spotlight now turns from hardware to software."
Xbox 360 sales surged with help from the releases of highly-coveted games such as "Halo 3," which is tailored exclusively for Microsoft's consoles.
Analysts maintain that the availability of fun, well-crafted gaming software is a key factor influencing console purchases.
"The 360 in particular seems to have benefited from a killer slate of hardware-acquisition-driving content including Call of Duty 4, Assassin's Creed and Halo 3," Frazier said.
Approximately 8.64 billion dollars was spent in the United States on game software for consoles and portable devices, according to NPD.
"Halo 3" was the top video game title, with 4.8 million copies sold.
Activision's "Guitar Hero" game in which competitors score points by playing along to rock music on guitar-like controllers raked in 820 million dollars, a new one-year record for video game franchise sales in the United States.
But Nintendo's "Mario Brothers" holds the throne as top-selling franchise of all time.
"Mario was the second-best selling video games property for the year and remains the historically best-selling property in the video games industry," Frazier said.