Sales of video game hardware and software dropped slightly in the first half of 2004, a new study has shown.
Industry dollar sales declined to US$3.4 billion in the first two
quarters of 2004, compared with US$3.5 billion in the same period last
year, according to figures released Thursday by The NPD Group. This
represents a fall of 2.5 percent for hardware, software and
accessories. However, overall unit sales went up by 1 percent, the
market researcher said.
Richard Ow, senior video games analyst at NPD, said price reductions on
Microsoft's Xbox and Sony's PlayStation 2 helped offset the loss
somewhat. Both companies have trimmed prices to boost sales of both hardware and software in preparation for follow-on machines.
"The reduced price points for Microsoft's Xbox and Sony's
PlayStation 2 helped to stabilize industry sales during the first half
of the year," Ow said in a statement. "While the first quarter of 2004
was showing double-digit losses in console hardware unit sales, with
the help of lower price points for the Xbox and PS2 during the second
quarter of 2004, the industry actually saw double-digit increases in
unit sales for the entire second quarter of the year."
Console hardware, portable hardware and portable software recorded
sales drops of 17 percent, 10 percent and 12 percent, respectively. But
software revenue jumped 4 percent, and accessory revenue was up 8
While the fortunes of the traditional game industry fluctuate, online games are fast gaining ground,
particularly multiplayer online games. This is reflected in the rise in
accessory sales in the first half of 2004. NPD said sales of
accessories--Internet components and specialty controllers--rose by 120
percent and 184 percent, respectively.