Video Games Sales Soften After Record 1999

Retail sales of US video game hardware, software, and accessories declined 5 percent in 2000 compared to 1999, according to The NPD Group, Inc.

Video game sales, which include console and portable hardware, software, and accessories, totalled $6.5 billion in 2000 after an all-time high of $6.9 billion in 1999. While dollars sales were down, unit sales were up slightly. According to NPD, unit sales rose 1 percent to 191.4 million in 2000, compared to 188.6 million in 1999.

Sales of video game console hardware and software were down 20 percent and 4 percent in terms of dollar sales, but the portable category showed significant growth in 2000. Portable software sales rose 26 percent in dollar terms and 28 percent in unit terms. Portable accessories were also a stromg performer in 2000, up 56 percent in dollars and 76 percent in units compared to 1999. According to NPD, the continued growth of the portable category was driven in part by the popularity of the Pokemon games, illustrated by the fact that four of the top 10 selling game titles for the year 2000 were Pokemon Game Boy and Game Boy Color.

Video game software accounted for more than 63 percent of the industry’s units and dollars in 2000. The decline in software sales contributed to the year’s moderate decline. At the same time, quality licenses and strong gaming content fueled extraordinary sales for products that featured Pokemon, Tony Hawk, WWF, Zelda, Grand Turismo, and NFL properties.

“The video game industry experienced a decline in overall dollar sales of 5 percent, but this was to be expected, as the video game indutry was going through a ‘transitional’ period,” said Richard Ow, NPD Interactive Entertainment Account Manager. “The bear stock market and low consumer confidence also contributed to a slow year in overall retail sales. The Sony PlayStation and Nintendo 64 systems are entering their sixth and fifth years, respectively, in the US market. While both systems may have already reached their peak in hardware sales, their software continues to sell.”

According to NPD’s TRSTS Video Game Service, the video game industry did gain 1 percent unit terms due to declining average retail prices of well-established consoles, such as Sega Dreamcast, Nintendo 64, Sony Playstation, and Nintendo Game Boy Color. The year 2000 sold 191.4 million units in video game hardware, software, and accessories, compared to 188.6 million units sold in 1999.

“Lower price points for these systems across all categories affected the overall dollar growth. Sega’s Dreamcast and Sony’s new Playstation 2 represent the beginning of a new generation of console sytems that will continue to build their market share in 2001,” Ow said. “Microsoft’s X-Box, Nintendo’s Game Cube, and new portable Game Boy Advance will all be making a debut this year, with each system sporting its won uniquely powerful gaming and entertainment qualities, the transtition from the 32/64-bit generation into the next generation of gaming will mark the beginning of an exciting new video game cycle.”

Sales of the total US interactive entertainment market, which includes PC entertainment and video game software, were flat at $5.7 billion for both 2000 and 1999. Interactive entertainment software unit sales were up 5 percent for the year, totalling 200.5 million units vs. 191.8 million units for the prior year. PC entertainment software performed well in 2000, with an 8 percent unit growth over 1999.

Top-Selling Console Gaming Software December 2000
Rank	Title	Publisher
1.	Pokemon Gold	Nintendo
2.	Pokemon Silver	Nintendo
3.	Tony Hawk Pro Skater 2	Activision
4.	Driver 2	Infogrames
5.	WWF Smackdown 2	THQ Inc.
6.	Final Fantasy IX	SquareEA
7.	WWF No Mercy	THQ Inc.
8.	Donkey Kong Country	Nintendo
9.	Banjo-Tooie	Nintendo
10.	Tony Hawk’s Pro Skater	Nintendo
Source: PC Data