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Video Game Sales Continue Record Pace

20 Mar, 2007 By: John Gaudiosi

There are no signs of slowdown in 2007, as February marks the second straight month of solid gains for game sales this year, according to the NPD Group.

Sales of video game hardware, software and accessories accounted for $978 million in February, up 53% over last February's $639 million. The sales of game software were up 28%, taking in $441 million for the month, compared to $345 million last February. Hardware sales doubled from last year, up from $203 million to $402 million for the month, thanks to strong sales of Nintendo Wii, Nintendo DS, Xbox 360 and PlayStation 2.

February sales were driven by substantially higher-than-expected next generation console and handheld (360, Wii, PS3, DS and PSP) software sales, according the Michael Pachter, video game analyst for Wedbush Morgan Securities.

“Next generation software sales increased $176 million with the bulk of the upside attributable to higher-than-expected console software sales,” Pachter said. “Current generation software sales were -33% (down $80 million), with a 15% decrease in PS2 software sales.”

On the hardware side, Nintendo's DS led the way, selling 485,000 systems during February. Its console counterpart was the second-best-selling system, as 335,000 Wiis were sold in the United States. Together, Nintendo systems represented 54% of all hardware sales in February, more than those of all other manufacturers combined.

“We're gratified that the explosive appeal of Wii, in terms of both new players and new ways to play, has created unprecedented demand, substantially beyond supply,” said Reggie Fils-Aime, president, Nintendo of America. “But we also understand that there are hundreds of thousands of consumers still waiting to get their hands on the system so we continue to both ship more units to retail every week and work non-stop to build capacity.”

The strength of Wii and Nintendo DS was also apparent in monthly software sales. Three of the top four best-selling games for the month (Wii Play and The Legend of Zelda: Twilight Princess for Wii, and Diddy Kong Racing DS for Nintendo DS) play exclusively on Nintendo systems. In addition, so far this year 10 of the top 20 best-selling games are exclusive for Nintendo hardware.

Domestically, Xbox 360 sold around 228,000, while Sony saw its older hardware outselling newer offerings. PlayStation 2 moved 295,000 units, followed by PSP's 176,000 and PlayStation 3's 127,000.

Microsoft made the most of its Halo 3 game by incorporating a free beta testing program on Crackdown, which catapulted that Xbox 360-exclusive title to the top of the charts, selling 427,000 copies in the United States. Halo 3 isn't expected to launch until November of this year. Microsoft will bring three versions of the game to retail: a standard version for $60, a limited edition version for $70 and a legendary edition for $130.

Pachter said total 2006 software sales (including PC games) were up 6% compared to 2005, and he believes that 2007 software sales will be up 17%, with strong sales in the first quarter (up 41% in the first two months) moderating to low double-digit growth during the second and third quarters when year-over-year comparisons become more difficult.

Top 10 games for February, 2007, based on number of units sold:

1. Crackdown – Xbox 360
2. Wii Play with Wii Remote – Wii
3. Diddy Kong Racing – DS
4. The Legend of Zelda: Twilight Princess – Wii
5. Guitar Hero 2 bundle – PlayStation 2
6. Gears of War – Xbox 360
7. MLB 2K7 – Xbox 360
8. Lost Planet: Extreme Condition – Xbox 360
9. WarioWare: Smooth Moves – Wii
10. NBA Street: Homecourt – Xbox 360

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