NPD: Game industry reaches $12.5 billion in '06

Industry grew 19 percent last year, according to industry-tracking firm's sales figures; December sees $3.7 billion alone.

With the shift to the new generation of consoles finally complete, there's little left to discuss about the transitional year aside from how well the industry weathered it. The industry-tracking NPD Group today released its US retail gaming sales results for December and for the entirety of 2006, and the figures showed a record sales year and growth almost across the board.

When hardware, software, and accessories sales are combined, the total US gaming market for the year amounted to $12.5 billion, a 19 percent jump over 2005's $10.5 billion, which was the previous highest grossing year in US gaming. December alone saw the industry bring in $3.7 billion, 27.8 percent more than the $2.9 billion it brought in for December 2005. The figures did not include sales of PC games, PC game subscriptions, or downloaded content.

Last month, retailers racked up $1.7 billion in game sales, a 5.4 percent increase over December 2005. While sales of games for the recently released Nintendo Wii and the PlayStation 3 added to the tally, console software sales overall were virtually unchanged, up only about .5 percent. However, last month's portable game sales showed significantly more growth over December 2005, as they cumulatively jumped 18.8 percent to $521.6 million.

The numbers were reversed on the hardware side of the equation. While portable systems showed the strongest growth as far as software went, sales of the hardware were actually down for the month, slipping 5.7 percent from the year before to $488.7 million. It was the Wii and PS3 driving hardware growth last month, as December's $1.1 billion take for console hardware was double December 2005's tally and then some, up 131.2 percent from the year before. Combining the portable and console markets, hardware sales for the month were up 59.2 percent to $1.6 billion.

As for which piece of hardware proved to be the most popular for the month, the Nintendo DS led all systems with 1.6 million units sold, trailed by the PlayStation 2 (1.4 million units sold) and the Xbox 360 (1.1 million units sold).

The newcomers to the mix fell a little short of analysts' projections, as the Wii sold 604,200 units in December, while the PS3 managed to move 490,700 system sales. Combined with their November hardware sales tallies, the Wii sold 1.1 million systems in the US through the end of the year, while Sony managed to move 687,300 PS3s.

According to NPD's figures, the growth of game sales in December was very much in line with game sales growth for the whole year. The US game industry's total 2006 game sales take came in at $6.5 billion, a 6.4 percent increase over 2005, with portable game sales experiencing pronounced growth of 18.8 percent to $1.7 billion and console game sales up a more modest 2.6 percent to $4.8 billion.

Similarly, hardware sales for the full year mirrored the December trend. Console hardware sales were up 87.5 percent to $2.9 billion, while portable hardware sales actually slipped .3 percent, racking up $1.6 billion. Combined hardware for the year was up 42.8 percent to $4.6 billion.

For the month, EA's Madden NFL 07 was the best-selling game, managing sales of 1.9 million units across all platforms. Call of Duty 3 took the second spot as the only other million-unit seller for the month, with 1.1 million copies sold. Trailing those two were Cars, Need for Speed Carbon, and Gears of War.

The single best-selling game for the year was the PlayStation 2 edition of Madden NFL 07, which garnered sales of 2.8 million units (Hall of Fame edition included). New Super Mario Bros. for the DS came in second with 2 million units sold in 2006, followed by Gears of War (1.8 million units sold, including collector's edition), Kingdom Hearts II (1.7 million units sold), and Guitar Hero 2 (1.3 million units sold, with or without guitar).

"We were expecting it to be a great year, with two new consoles being introduced," NPD senior marketing manager David Riley told GameSpot. "Also, there were tons of great new games for existing platforms, including Final Fantasy XII, [The Legend of Zelda] Twilight Princess for GameCube, and Guitar Hero II for PS2. There were also holdover hits like New Super Mario Bros. for the DS."

Despite the flat numbers posted for portable hardware sales, Riley wasn't too concerned.

"I would prefer to say they're flat," he said of the figures. "It's a transition year for the console market, so there's a sector that's bound to suffer. The DS had a great year."

226 Comments

  • illisium

    Posted Jan 22, 2007 11:50 pm GMT

    "Meh and we still aren't getting the respect we deserve as an industry."

    All others who want to see gaming mainstreamed, say aye.

    Nay.

  • capthunt

    Posted Jan 19, 2007 7:55 am GMT

    w00t

  • Ariolander

    Posted Jan 16, 2007 8:27 pm GMT

    So this means we are what? 1/2 or 1/3rd the size of the Movie Industry and finally jumped over the Music Industry?

    Meh and we still aren't getting the respect we deserve as an industry.

  • halofreak3487

    Posted Jan 16, 2007 4:45 pm GMT

    whoa

  • coolasj19

    Posted Jan 16, 2007 3:15 pm GMT

    except for gears of war those are all ps2 games
    horray!!!! cheers for all!!!!
    the more video games grow and become part of the american "culture" and market the less people are to say "video games make u lazy" " video games make your brain rot " and as a result
    are less likey the industry will have another crash

  • siran_choke

    Posted Jan 16, 2007 2:29 pm GMT

    are they going to release a 360 soon with HDMI output?

  • lawsond

    Posted Jan 16, 2007 1:25 pm GMT

    I enjoy cheese. I enjoy games. I enjoy hanging out with my wife more...

  • SCPsyWarrior

    Posted Jan 16, 2007 9:12 am GMT

    How did this Blu-Ray vs HD-DVD argument get into this story anyway? The format war will end the same way as the DVD- vs DVD+ war did - everyone will have a player that plays both formats.

    -PsyW

  • Zinimus

    Posted Jan 16, 2007 7:58 am GMT

    You guys are morons; LG just made a player that plays both. There's the answer to the format war. http://tech.msn.com/guides/ces/article.aspx?cp-documentid=2319188

    You pions can shut up now.

  • campo0000

    Posted Jan 16, 2007 7:14 am GMT

    So much for the crashing video game market we heard about a few months ago...W00T gamers!!

  • gamerfreak187

    Posted Jan 15, 2007 9:04 pm GMT

    ricsuave
    "Ok, I have DVD I got an HD TV. Look, it's a new player, hmm, HD-DVD. Wow EXACTLY what I was looking for."

    In all actuality, I don't have a PS3, nor plan on getting one at least until FF XIII comes out (I'm a FF fan, for sure). PS2 is the only console I play, and thats because it can play the majority of FF games. Other system: DS--> for the GBA and DS Final Fantasy's. And yes, if I was upgrading my disc, it would be to HD-DVD also, it just makes more sense. What I think Sony is trying to do is implement the Blue-Ray player with the PS3 so that it gets out on the market, without having to try to sell the highly expensive Blue-Ray player. This way, people who own a PS3 will buy the blue-ray discs to watch, hopefully show its quality to their friends, brag about it; basically sell it themselves. I'm not trying to disagree with you, I'm just saying that Sony has their own objectives, and are doing them quite well I think. Soon PS3's will start selling again once the better games come out.
    On a side note:
    My mistake about Laserdisc and Betamax. However, Laserdisc came out way before the technology to support it was here, and betamax actually had quite the breakthrough with early model camcorders; ours used one for sure, I have a tape right here.

  • aRE-you-AFraid

    Posted Jan 15, 2007 7:23 pm GMT

    wow

  • standcm12

    Posted Jan 15, 2007 6:52 pm GMT

    go gaming.

  • Beesond

    Posted Jan 15, 2007 3:01 pm GMT

    Yeah I got a PS3, around my area they aren't sitting on shelves, so I feel kinda lucky.

    Yet again, how many times can I play Resistance over and over, the internet mutliplayer is fun but only for so long.... PS3 really needs some games, its library is so dull. Sucks to get a new system, play the hell outta a decent game and then be like, "so uh, was that it...". Plus all the Blu-ray movies right now are half-***ed, and look slighty better than their DVD cousin.

    Then again, at least when MGS4 and the 2 FFXIII games comeout I am only shelling out 180 - 200 bucks for 3 of em, ouch, but better than 800 all at once.

    Either way, I really want to get a Wii especially for Super Smash Bros Brawl, but they are sold out around here too, not badly, but it could take a week or so to get one. Then again I got awhile before that is on shelves

    And now that Xbox 360 is out, there a few games i would buy but , in my opinion, no must haves, until Halo 3 and Lost Odessey anyways, But there are plenty to borrow and rent to keep me busy for 2 or 3 years.

  • CaptainDingo

    Posted Jan 15, 2007 2:05 pm GMT

    There was one last Wii in the GameStop I went to. Unfortunately I don't have the money to buy one, so chances are it's long gone by now.

  • FatherTimex

    Posted Jan 15, 2007 1:40 pm GMT

    Every store I've been in that sells PS3's has a huge freaking stack of them. They're not moving.

    In contrast, I have yet to be able to get my hands on a freaking Wii.. as soon as they come into any store, they sell out immediately.

  • ricsuave

    Posted Jan 15, 2007 1:06 pm GMT

    "infrared13
    HEY ricsuave

    Where do you live? "

    HEY infrared13, I live in New York City, and if the Toys R Us smack dab in the middle of Times Square has PS3's sitting on the shelves taking up space, then Sony's got problems.

  • ricsuave

    Posted Jan 15, 2007 1:03 pm GMT

    "gamerfreak187
    Laserdisc and betamax were produced trying to compete with normal DVD's, that is why they flopped"

    WHAT?? Laserdisc and Betamax were produced before anyone ever even HEARD of DVD.

    And while I think you are far from the drooling Sonybots that are on here, you really need to explain to me how IF, and that's a big IF, the populace in general id going to upgrade from DVD why they would choose bluray. Here's my take on the general thought process:

    "Ok, I have DVD I got an HD TV. Look, it's a new player, hmm, HD-DVD. Wow EXACTLY what I was looking for."

    Simple? Yes. But what people on here need to realize is that THE MAJORITY OF THE WORLD ARE NOT TECH NERDS THAT KNOW THE NUMBER OF TIMES MEDIA DISKS SPIN PER SECOND. Even fewer are sad enough to know the difference between 1080i and 1080p.

  • gamerfreak187

    Posted Jan 15, 2007 12:46 pm GMT

    ricsuave "I also remember laserdisc players costing almost $1000. I also remember Betamax costing almost $1000. What's your point? Ask the laserdisc players and betamax owners how confident that are in plunking down chunks of cash in the hopes Sony got it right?"

    You make a valid point, but that was before there was a reason for having a new disc type. We are entering the HDTV era, so we are in need of new disc types, HD-DVD and Blue-Ray, so that the graphic quality of the HDTV can be fully used. Laserdisc and betamax were produced trying to compete with normal DVD's, that is why they flopped. And if you think about it, those who want to use HD-DVD's for their 360 have to buy the add-on or a HD-DVD player separate, so ultimately it was wise just to include it, even if it would cost more.

  • infrared13

    Posted Jan 15, 2007 12:14 pm GMT

    HEY ricsuave

    Where do you live? I am in South Florida where there are tons of EB's/Gamestops ect... (5 right near me between the malls and strip malls) and while they do get PS3s in I never see them in stock and we go in on a weekly basis. So maybe you shouldn't speak for the entire USA. The Target store told us they get snatched up within 30minutes of putting them out as well.

  • t_walk1

    Posted Jan 15, 2007 11:51 am GMT

    oops forgot to mention those figures were for World of Warcraft, sorry need more coffee

  • t_walk1

    Posted Jan 15, 2007 11:50 am GMT

    brhisawesome

    If you notice the article reads "The figures did not include sales of PC games, PC game subscriptions, or downloaded content." However, there was a gamespot article last week which said there are currently 8 million subscribers (at roughly 15 bucks a month each) and initial purchase of the game (around 40 bucks if I remember right) so for the year if you do the math it comes out to $120,000,000 (per month) or 1.440 billion/year for subscription, and $320,000,000 in total sales since the games release. Altogether, WoW alone would up that figure by over 1% of the total with subscriptions alone. MMO for the win.

  • Specter03

    Posted Jan 15, 2007 9:13 am GMT

    looks good for everyone

  • kornkid606

    Posted Jan 15, 2007 7:20 am GMT

    In response to ricsuave: Yes, your right, devs don't work for free and a lot of that 12.5B goes to a lot of different places, but last time I checked, devs aren't exactly getting rich . It is true that game devs make good money, but the people who see the most of the money are the same people who are responsible for the {future) demise of video games if the current paradigm doesn't change soon. imho anyways

  • brhisawsome

    Posted Jan 15, 2007 6:28 am GMT

    going down the page:

    i wonder how much of this is due to mmo's as a whole i mean not everyone plays WoW *gasp* i mean theres still everquest, autoassualt, lineage 2, the list goes on

  • brhisawsome

    Posted Jan 15, 2007 6:24 am GMT

    and for the record, im going for the 360 like everyones saying, its got the games, the price, the only, the graphics, it may not have extras like the six axis, but at this point and time PS3 is not using that very well and prob will not untilwarhawk or w/e comes out

    moneys down on 360

  • brhisawsome

    Posted Jan 15, 2007 6:21 am GMT

    ricsuave:
    hence why its so easy to get a PS3 and why there so cheap right?

  • opp789

    Posted Jan 14, 2007 10:09 pm GMT

    ok, my bad then. GO WII!!!

  • ricsuave

    Posted Jan 14, 2007 8:13 pm GMT

    "opp789
    Both the wii and ps3 have sold every console made right?"

    Wrong. The Wii might have, but there are craploads of PS3's still on the shelves.

  • Fingerella69er

    Posted Jan 14, 2007 7:27 pm GMT

    cool I guess?

  • opp789

    Posted Jan 14, 2007 5:24 pm GMT

    OK, everyone here needs to stop and think. Both the wii and ps3 have sold every console made right? So basically, whoever made more wins. These stupid sales things are really pointless until both Nintendo and Sony make more supply then demand. Once you start seeing the systems sitting on the shelves, then you should check the numbers to see who "won". And btw, Im not a Sony fanboy, i personally think that $600 is $300 too much, why not get a 360 for less, the gx are the same, and live is better. I don't have either, i Have a Wii. But somebody needs to have some common sense and realize that its just about who has made the most right now.

  • ricsuave

    Posted Jan 14, 2007 4:19 pm GMT

    "gamerfreak187
    I hate how people think that Sony is making so many horrible ideas and charging way too much for everything. Does no one remember the pre-dvd era? Is everyone on here 10 years old? DVD players use to cost up to $1000 dollars just like a Blue-Ray Disc player."

    I also remember laserdisc players costing almost $1000. I also remember Betamax costing almost $1000. What's your point? Ask the laserdisc players and betamax owners how confident that are in plunking down chunks of cash in the hopes Sony got it right?

  • saturndust

    Posted Jan 14, 2007 3:59 pm GMT

    gosh, why are these fanboys always like that? i mean, one guy says sony's selling like armani and the other talks about sony's being a MILE AHEAD... PLEASE, stop it!!! sony might have a great tech but they gotta think about the customers and specially their market and some financeer decisions have to be taken. Sony's gotta focus and stop pretending. i.e. a ps3 is worth 600 bucks (straight from any store, no ebay crap) in the USA, by the tme it gets to mexico (and 'm talking about the official launch and wal mart or anyother store sales) it gonna be on a priceof 13000 mexican pesos, around 1200 USD (yeah, twice the price and let's remember, it's wal mart) while the xbox 360 came just around 70 bucks higher than in the USA and some games are even cheaper to buy here (bought some months ago the gears limited edition in around 65 bucks) I DON'T MEAN THE PS3 TO BE CHEAPER HERE, JUST LEAVE IT ON A FAIR PRICE, NOT TWICE THE PRICE FROM OTHER COUNTRIES, SONY, WAKE UP, YOU ARE NOT LAUNCHING THE PS3 ON MANY PLACES, YOU ARE JUST ALLOWING THE STORES TO SELL IT AT ANY FREAKING PRICE

  • Vraeth

    Posted Jan 14, 2007 3:58 pm GMT

    I'm putting my money on Xbox360. It's got graphics that rival PS3, and it's at LEAST $100 cheaper.

  • gamerfreak187

    Posted Jan 14, 2007 3:03 pm GMT

    Issachar
    Wow sony managed to go from first to last in an instant. I overheard my friends at the bar tonight talking about blu-ray. It was so funny i thought.... neither of them really knew what it was. 'It's like aDVD but you have to have a HDTV to see the difference and there are like 10 movies out on it right now'....'why would i buy that?' get a clue sony. just because you charge a lot for something doesnt make it cool, you arent selling clothes.

    I hate how people think that Sony is making so many horrible ideas and charging way too much for everything. Does no one remember the pre-dvd era? Is everyone on here 10 years old? DVD players use to cost up to $1000 dollars just like a Blue-Ray Disc player. Sony is just taking the advanced technology available and making use of it. Sooner or later, everything is going to shift to HD-DVD and Blue-Ray and DVD's will be in the $3 bin at Walmart. I think Sony did the right thing by gaining the technological upper-hand. Sure, the games don't look absolutely fabulous right now, there technical problems, and its overpriced. But remember, it just came out, and it's going to be that way, no matter what the system is. 1 good launch title, 80 bad ones, even the PS1 and N64 had that problem, not to mention the countless 360's called back. Also, did anyone not notice how the PS2 was still second in most hardware sold? A system almost 5 years old is still beating the 360 in sales; I don't think Sony is out at all my friends. In fact, I think this is just the beginning of the next technological era, and Sony is ahead by a mile.

  • ricsuave

    Posted Jan 14, 2007 2:57 pm GMT

    "Hinduce
    Damm can i barow a doller then?"

    Only if you promise to spend it on spelling lessons.





    Sorry, had too. Wide open.

  • ricsuave

    Posted Jan 14, 2007 2:54 pm GMT

    "kornkid606
    if 12.5 billion is the reason you want to get in the game industry then you are the exact kind of person that shouldn't be in the industry. I believe it is called the EA ambition. You know who sees most of that 12.5 billion? Publishers. Publishers who can afford to pay large sums for terrible games. Publishers who wont allow a game the time it needs to become a great game. Publishers who just push out mindless, uncreative crap and charge you $50 for it. Publishers are exactly what is wrong with the industry today and, apparently, they are making more than ever."

    Cause we all know developers work for free. Just for that love. :rollseyes:

  • Virgil28

    Posted Jan 14, 2007 12:19 pm GMT

    When I saw that Richard Pryor picture, I thought he was holding a wii-mote for a second.

  • demondragon55

    Posted Jan 14, 2007 10:59 am GMT

    Money, money.... my money! But my 360 was worth it. Now I need a Wii and I'll be good.

  • MultimediaJay

    Posted Jan 14, 2007 9:59 am GMT

    Yes, and I'm sure all these new wicked expensive consoles that became available this year had absolutely nothing to do with it. (PS3 in 3rd place and X360 tied for 4th for most expensive console launch MSRPs).

  • TheCritic9392

    Posted Jan 14, 2007 9:36 am GMT

    Nintendo had nothing to do with it......they haven't had a good console since the N64.....

  • jazilla

    Posted Jan 14, 2007 9:00 am GMT

    I had a recording apologize to me for people losing my luggage. TEchnology is going to kill us all.

  • axelink

    Posted Jan 14, 2007 8:14 am GMT

    all thanx to nintendo.

  • coreyb42

    Posted Jan 14, 2007 6:26 am GMT

    I want my $2!

  • K_A_R

    Posted Jan 14, 2007 5:40 am GMT

    oooooooooohh.........now thats allooooooooooooot !!!!!!!

  • Mutated_Nantuko

    Posted Jan 14, 2007 12:29 am GMT

    That's twice as many dollars as people. Think about it, everyone in the world would get 2 dollars from the video game industry, that's how much money they make.

    Wow..

  • Ackad

    Posted Jan 13, 2007 10:23 pm GMT

    well well well, I hear business

  • kornkid606

    Posted Jan 13, 2007 9:09 pm GMT

    if 12.5 billion is the reason you want to get in the game industry then you are the exact kind of person that shouldn't be in the industry. I believe it is called the EA ambition. You know who sees most of that 12.5 billion? Publishers. Publishers who can afford to pay large sums for terrible games. Publishers who wont allow a game the time it needs to become a great game. Publishers who just push out mindless, uncreative crap and charge you $50 for it. Publishers are exactly what is wrong with the industry today and, apparently, they are making more than ever.

  • kingalasdair

    Posted Jan 13, 2007 7:52 pm GMT

    If it doesn't monitor any PC related sales, then it isn't monitoring the games industry, period. How do they know, for example, that the increase in console related sales isn't linked with a decrease in PC related ones? I'm not saying that this is the case, but merely highlighting that if you don't look at PC, you don't get the full picture.

  • ConManWithGun

    Posted Jan 13, 2007 5:54 pm GMT

    thats nice

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