2007 A Record Year For U.S. Videogame Industry - InformationWeek

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Software // Enterprise Applications

2007 A Record Year For U.S. Videogame Industry

Nintendo had the No. 1 and No. 2 spots in hardware sales in terms of shipments, according to an NPD Group survey.

The U.S. videogame industry soared 43% last year to achieve a record $17.94 billion in sales, a research firm said Friday.

While hardware sales, including the Xbox 360, Sony PlayStation 3 and Nintendo Wii, recorded the highest growth rate, software and accessories also reached their own "personal bests" in terms of annuals sales," Anita Frazier, video games analyst for The NPD Group, said in an e-mailed commentary.

With hardware having such a banner year in 2007, software sales is expected to show the highest growth rate this year, as console buyers look to get the most out of their purchase. "While we will continue to see strong hardware sales, particularly if prices come down again, the spotlight now turns from hardware to software," Frazier said.

Nintendo was the biggest winner last year, according to NPD. The company had the No. 1 and No. 2 spots in hardware sales in terms of shipments with the portable DS, 8.5 million units, and the Wii console, 6.29 million units. Microsoft shipped 4.62 million units of the Xbox 360 to come in third.

Sony shipped 3.97 million units of the PlayStation 2, which outsold the PlayStation 3, 2.56 million units. "Given the breadth of available content and the price point of the PS2, it's a mass market friendly choice and will continue to be an important part of the games ecosystem for several years," Frazier said. The PlayStation Portable fell just behind the PlayStation 2 with 3.82 million units.

Overall, videogame hardware sales were 54% higher than 2006, reaching $7.04 billion. Software sales rose 34% to $8.64 billion, and video game accessories sales increased 52% to $2.26 billion.

On the software side, Microsoft's "Halo 3" for the Xbox 360 was the biggest seller of the year with 4.82 million units shipped. "This performance certainly puts it among the elite in gaming history with performance similar to that of 'Grand Theft Auto: Vice City' in 2002, and 'GTA: San Andreas,' and 'Halo 2' in 2004," Frazier said.

"Wii Play," a collection of nine games sold with a Wii remote, was the second biggest seller with shipments of 4.12 million units, followed by "Call Of Duty 4: Modern Warfare" for the Xbox 360, 3.04 million units. "Guitar Hero II: Legends of Rock" for the PS2 was fourth with 2.72 million units sold, and "Super Mario Galaxy" for the Wii followed with 2.52 million units.

Sales of the "Guitar Hero" games reached more than $820 million last year, a record for any single franchise in any one-year. "In a year of records, we'd be remiss not to talk about 'Mario,'" Frazier said. "'Mario' was the second-best selling video games property for the year and remains the historically best-selling property in the video games industry."

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