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Burgeoning Software Offsets Declining Console Sales

26 Jan, 2004 By: Erik Gruenwedel

Despite a 27 percent drop in U.S. sales of video game consoles, overall sales of games, consoles and accessories topped $18.2 billion in 2003, a 2.2 percent drop from 2002, according to Port Washington, N.Y.-based research firm The NPD Group.

Sales of portable game devices reached $750 million compared to $490 million in 2002.

Sales of PC-related video games fell 14 percent, to $1.2 billion in 2003, compared to $1.4 billion in 2002.

Filling the void were software sales for stand-alone consoles and portable devices at $5.8 billion, up 5.4 percent from last year.

Overall software sales were $7 billion, a 1.5 percent increase from 2002 with $6.9 billion.

Sales of “M” (mature)-rated games fell 1.3 percent, to 11.9 percent of total software sales, compared to a 1 percent drop (54 percent) in “E” (everyone)-rated software, according to the Entertainment Software Association (ESA).

Sales of “T” (teen)-rated games increased 2.9 percent, to 30.5 percent, of total market share.

“The fact that 44 of the 49 games that sold more than half a million units were rated “E” or “T” reflects the fact that this industry is producing a broad array of … content appropriate for people of all ages,” said Douglas Lowenstein, president of ESA. “That's a major reason why entertainment software continues to outpace the annual growth posted by the movie and music industries.”

Despite the expected release of several prominent software titles this year, experts doubt overall game sales will top last year.

“With the continued price gauging of both hardware and software categories, industry sales will be hard-pressed to surpass 2003 through the remainder of the current hardware platform's life cycles,” said Richard Ow, senior video games analyst at The NPD Group.

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