Video Game Sales Surge in April

The video gaming industry reported robust sales figures for the month of April 2011 and took a significant lead over the prior year. According to market research company The NPD Group, US retail video games sales were up 20.0% from the comparable previous year to $961.2 million.

The increase in the overall sales figures of the video game industry was primarily attributable to a delayed Easter holiday and the release of new and popular titles.

Software sales in the US jumped 24.0% year on year to $533.6 million, exceeding analysts’ projection of a 15.0% increase. This increase was primarily attributable to stronger sales figures of debut games like Mortal Kombat and Portal 2.

Games that boosted software sales included the top-ranked Warner Bros. Interactive’s Mortal Kombat. Valve Software’s Portal 2 came in the second place. Interestingly, “Portal 2” was distributed by Electronic Arts (ERTS). The third and fourth spots were taken by LucasArts’ Lego Star Wars III and Activision Blizzard’s (ATVI) top-selling franchise, Call of Duty: Black Ops, while Electronic Arts’ Tiger Woods PGA Tour 12 was fifth on the list.

However, last month’s winner, Nintendo’s Pokemon series, dropped to the ninth position this month.

The much awaited Michael Jackson: The Experience, debuted at No. 8.

Hardware sales in the US were $279.9 million, an increase of 12% from the comparable previous year. Data released by NPD suggests that Sony Corp’s (SNE) PlayStation 3, play station portable (PSP) and Microsoft Corp’s (MSFT) Xbox 360 all witnessed higher unit sales. In terms of numbers, Xbox 360 was the top-selling gaming console with 297,000 units being sold, ahead of Nintendo DS and PlayStation 3.

Sales of gaming accessories jumped 20.0% from the previous year to $147.6 million. This increase was driven by strength in the Xbox LIVE 1600 MS Point Game Card and SOCOM 4: Full Deployment Bundle.

However, analysts expect a modest decline in video game sales in 2011. The gamers have shifted to online multiplayer games and more recently to co-operative games, which are multiplayer games emphasizing on constructive game play rather than competition.

This shift in gamers’ preferences might have a negative effect on new titles and sales of new games. Additionally, the demand for “apps” for mobile devices such as Apple Inc‘s (AAPL) iPad and online social games have been changing the gaming industry rapidly. Although consumers continue to buy games that can be downloaded to consoles or computers; digital downloads, used game sales and game rentals are gaining popularity.

We believe that cut-throat competition within the industry will make it difficult for any single company to gain significant market share in 2011 and that is evident from the monthly reviews. Moreover, increasing competition from social networking companies, such as Facebook, remains a major concern.

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