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Wii Leads Gains in Videogame Sales

Started by dhilipkumar, Dec 13, 2008, 12:38 PM

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dhilipkumar

U.S. videogame sales in November exceeded analysts expectations, according to new data from NPD Group, which offers fresh evidence of the $22 billion-a-year industry's recession resiliency.

The new data also suggests Electronic Arts Inc.'s recent sales warning may have more to do with issues specific to the Redwood City, Calif., company than macroeconomic pressures on the entire videogame industry.

NPD reported that U.S. sales of videogames grew 10% to $2.91 billion in November, while sales of videogame consoles were also up 10%, to $1.21 billion. Game sales growth exceeded analysts expectations of 6% to 9%.

The results are notable given analysts had been bracing for downside from the recession, as well as this year's late Thanksgiving. NPD's November data includes three days of post-Thanksgiving shopping, when videogame buying reaches an annual peak. Last November had eight post-Thanksgiving days.

"The industry is still on pace to achieve total year revenue of $22 billion in the U.S.," NPD analyst Anita Frazier said. "The videogame industry continues to set a blistering pace."

According to NPD, November's top-selling videogames were well-established franchises, including "Gears of War 2", which was the top seller with 1.56 million units. The game is published by Microsoft Games Studios, which is part of Microsoft Corp., and is exclusive to Microsoft's Xbox 360 game console. "Call of Duty: World At War" from Activision Blizzard Inc. came in at No. 2, with 1.41 million units sold, NPD reports.

November's top 10 best-selling games included four titles from Nintendo Co. Ltd. Three of the top-sellers were for various Wii motion-controlled game consoles.

"Titles that have neither strong marketing, strong positioning or strong value proposition are struggling in this marketplace," said Reggie Fils-Aime, chief operating officer of Nintendo of America, a Nintendo subsidiary.

The current dynamic has created problems for Electronic Arts, Redwood City, Calif. The company on Tuesday warned it will miss its financial projections for its fiscal year ending March 31. Five analysts downgraded the company, and shares have fallen nearly 20% since.

"We saw a big improvement in the quality of our games, but that hasn't translated into enough sales," EA Chief Executive John Riccitiello said on a conference call with analysts Tuesday.

Nintendo dominated November console sales. Its Wii console was the top seller, with two million Wii sold, which is more than double from last November. More than 1.5 million handheld Nintendo DS were sold in November, NPD reported. Nintendo says both figures are all-time monthly highs for any month that isn't December. Sales of Microsoft's Xbox 360 rose 8% from a year ago to 836,000, NPD reported.