'Gears of War 2' helps spur 10% jump in video game industry sales
Posted December 11, 2008 7:18 p.m. EST
Updated December 12, 2008 10:59 a.m. EST
NEW YORK — Americans may be cutting back on holiday shopping, but they are still buying video games – to the tune of nearly $3 billion in November, according to data from market researcher NPD Group.
U.S. retail sales of video game hardware, software and accessories jumped 10 percent last month from the year-ago period to $2.91 billion, boosted by strong sales of Nintendo Co.'s Wii, Microsoft Corp.'s Xbox 360 and the alien shooter game "Gears of War 2" that was developed by Epic Games in Cary, N.C.
NPD reported that "Gears" sold 1.6 million copies.
However, Microsoft, which published the game, has told Epic that more than 3 million copies were sold as of the first week of December.
The availability of a broad range of games is one reason for the industry's ongoing solid performance, said NPD analyst Anita Frazier. Games also provide a relatively cheap form of stay-at-home entertainment.
The industry, Frazier said, is still on track to rack up $22 billion in U.S. sales this year.
November and December are crucial months for video game companies. Many of them make the bulk of their money during the holidays.
This week, Electronic Arts Inc., the publisher of the popular "Madden" football game series, warned that sales have been weak in North America and Europe. Without giving specific guidance, EA said its fiscal 2009 results will fall short of the forecast it gave in October. But EA's warning did not seem to signal a broader downturn for the industry.
Hardware sales, which include gaming consoles like the Wii as well as handheld systems like Sony Corp.'s PSP, jumped 10 percent to $1.21 billion.
Nintendo enjoyed perhaps the greatest success in November, with 2 million Wiis sold – the most yet in a month, according to Denise Kaigler, vice president of corporate affairs. The Japanese company boosted production of the easy-to-master gaming system in July to keep up with seemingly insatiable demand. Nonetheless, on Thursday afternoon, both Best Buy's and Wal-Mart's Web sites were out of stock.
Microsoft's Xbox 360, meanwhile, sold 836,000 units. Spokesman David Dennis said the company's games business had "great momentum" heading into the final stretch of the holiday season. The PlayStation 3, from Sony, sold 378,000 units.
Sales of video game software grew 11 percent to $1.31 billion. Besides "Gears of War 2," which sold 1.6 million copies, "Call of Duty: World at War" by Activision Blizzard Inc. and Nintendo's "Wii Play" and "Wii Fit" also did well. Electronic Arts had just one title, the zombie horror game "Left 4 Dead," in the top 10.