The 21 percent December drop and the 8 percent full-year decline both describe new U.S. retail sales of video game hardware, software, and accessories, as estimated by The NPD Group and reported by GameSpot in January 2012. They do not measure everything consumers spent on games. Once used games, rentals, subscriptions, digital downloads, and mobile and social games are included, NPD’s preliminary estimate for 2011 was only about 2 percent below 2010.
What the two headline percentages measure
NPD’s retail series counts what was sold through physical retail channels in three buckets: hardware (consoles and handheld devices), accessories, and software. The December and annual totals are reported in dollars, not units, and cover the United States only.
| Category (U.S. retail) | December 2011 | Change vs. December 2010 | Full-year 2011 | Change vs. 2010 |
|---|---|---|---|---|
| Total (hardware, software, accessories) | $3.99 billion (from $5.07 billion) | -21% | $17.02 billion | -8% |
| Hardware (non-PC) | $1.32 billion | -28% | $5.58 billion | -11% |
| Accessories | $628.7 million | -27% | $2.61 billion | -11% |
| Software, non-PC | $2.04 billion | -14% | $8.83 billion | -6% |
| Software, including PC games | $2.14 billion | -15% | $9.27 billion | -8% |
Figures are as reported by GameSpot in its January 12, 2012 report on December data and its year-end report on 2011 totals.
Why the total uses non-PC software
The $17.02 billion total is built from non-PC hardware ($5.58 billion), accessories ($2.61 billion), and non-PC software ($8.83 billion). The PC-inclusive software line ($9.27 billion) is $0.44 billion higher, so a total that included PC games would be roughly $17.46 billion. The December total works the same way: $1.32 billion plus $628.7 million plus $2.04 billion equals the $3.99 billion reported, and including PC software would add about $0.10 billion. Readers comparing these totals with other sources should check which software definition is used.
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Why December fell further than the year
December is normally the largest month for retail game sales. In 2011 it accounted for 23 percent of annual sales, against a ten-year average of 28 percent. NPD analyst Anita Frazier, quoted by GameSpot in its December report, said she had expected a larger share because of the strong slate of content released in the fourth quarter: “I had expected December sales to represent a larger portion of total year sales than what occurred.”
The gap is easier to see in dollars. If December had held its ten-year average share of the same $17.02 billion annual total, it would have been about $4.8 billion, rather than $3.99 billion. This is an illustrative calculation from NPD’s figures, not a figure NPD published.
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Retail sales and all-channel game spending are different measures
The 8 percent figure does not include digital games. NPD also publishes a broader estimate of consumer spending on game content across several channels. For 2011 it was preliminary and estimated at $16.3 billion to $16.6 billion, about 2 percent below 2010, as reported by GameSpot.
| Measure | What it covers | 2011 figure | Change vs. 2010 | Excludes |
|---|---|---|---|---|
| Retail sales | New hardware, software, and accessories sold through U.S. retail | $17.02 billion | -8% | Used games, rentals, subscriptions, digital and mobile spending |
| All-channel game content spending | Used games, rentals, full-game and add-on downloads, subscriptions, mobile and social games | $16.3 billion to $16.6 billion (preliminary) | About -2% | Hardware and accessories |
The two totals should not be added or substituted for each other. One is a retail hardware-and-software series, the other a content-spending estimate across channels.
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The ESA’s 2012 annual report also cites NPD as its data source and defines digital sales to include subscriptions, digital full games, digital add-on content, mobile apps, and social-network gaming. It is useful for industry context, but the precise retail comparison in the headline comes from NPD’s own categories.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.What explains the decline
The sources establish the size of the decline more clearly than its causes. Frazier’s year-end comments, quoted by GameSpot, said that increases in other areas “partially offset the decline in new physical retail sales of content in 2011.” The reporting does not give a full causal breakdown, so the percentages should be read as a description of what happened in retail, not as proof of why.
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Chart results show that individual titles still sold strongly during the decline. GameSpot’s December chart listed Call of Duty: Modern Warfare 3 first (Xbox 360, PS3, and PC), followed by Just Dance 3, The Elder Scrolls V: Skyrim, Mario Kart 7, and Battlefield 3. Modern Warfare 3 also ranked first on the annual chart. These rankings show which titles led, not why total retail sales fell.
How to read the headline correctly
- Geography: The 21 and 8 percent figures cover U.S. retail only, not worldwide sales.
- Measure: They are dollar revenue at retail, not unit sales or units shipped.
- Channel: Digital, used, rental, and subscription spending are outside the retail total and are covered by the separate all-channel estimate, which fell about 2 percent.
- Software definition: Check whether a figure includes PC games. The totals above use non-PC software.
- Status: These are NPD estimates as reported by the press and industry trade reports, not audited company results. The all-channel 2011 figure was preliminary when reported.
Read this way, the headline describes a sharp fourth-quarter drop in physical retail sales and a smaller decline in total game spending across channels.
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