Handhelds Thrive, Consoles Decline; Record Sales

Video game sales reached an all-time high in the United States in 2005, despite a disappointing holiday season. The handheld gaming market led growth in the industry with a 96 percent hardware increase over 2004, while portable software sales hit $1.4 billion, a 42 percent increase. Nintendo’s Game Boy Advance took in 52 percent of portable software sales. As a result of the booming handheld market, video game software and hardware topped $10.5 billion, a six percent increase over 2004’s $9.9 billion and topping 2002, which held the previous record of $10.2 billion.

The Xbox 360 contributed to declining hardware sales as it missed its projected sales target and consumers appear to be holding off for the looming releases of PlayStation 3 and Revolution instead of buying current hardware available on the market today. Overall, console sales dropped 3 percent from 2004. Console game sales dropped a measurable amount at 12 percent.

“The introduction of the Xbox 360 was a defining moment for the industry in 2005. However, it goes without saying that the full impact of next generation consoles on the consumer market won’t unfold until later this year when Sony and Nintendo’s video game consoles hit U.S. retail shelves,” said Anita Frazier, industry analyst, The NPD Group. Wedbush Morgan Securities analyst Michael Pachter said, “You need people to buy more stuff. This is a bad downturn.â€?

Electronic Arts was a favorite among software publishers as it managed to hold five of the top 10 best selling games in 2005. The Madden franchise was the best selling game with the PS2 version of the title topping all other game sales last year (the Xbox version came in fourth). Pokemon Emerald for the Nintendo Game Boy Advance took second place.

Leave a Reply