Computer and Video Game Industry Tops $22 Billion in 2008

December Software Sales Help Set New Record

Overall computer and video game industry hardware, software and peripheral sales climbed to $22 billion in 2008, with entertainment software sales comprising $11.7 billion of that total figure—a 22.9% jump over the previous year— the Entertainment Software Association (ESA) announced today. The industry set the new record, calculated by market-research firm NPD Group, on the strength of a December sales month in which industry revenue ($5.3 billion) topped $5 billion for the first time in any single month. By comparison, as recently as 1997, the industry generated $5.1 billion over the entire year.

"Even in difficult economic times, the video game industry continues to support our country’s local, state and national economies with record-breaking sales figures and rapid technological innovation,” said Michael D. Gallagher, president and CEO of the ESA, the trade association representing U.S. computer and video game publishers. “Our industry’s exceptional creators, artists, and storytellers, coupled with a commitment to providing unparalleled entertainment, have fueled high-octane growth, turning video games into the most sought-after medium on the market today.”

"The $11.7 billion in software sales generated in 2008 is more than total industry revenues were in 2005, but even with the strong market growth of the gaming industry over the past few years, what we are seeing is an accumulation of more sales by a select group of titles,” said Anita Frazier, industry analyst, The NPD Group. “In 2005, when the current console generation began to be introduced, the top 20 games of the year accounted for 9 percent of total unit sales. Today, the top 20 account for 15 percent of total unit sales.”

The NPD Group revealed that, in 2008, total U.S. video game console software sales reached $8.9 billion (189.0 million units), PC game sales hit $701.4 million (29.1 million units), and portable software topped last year’s record sales with $2.1 billion (79.5 million units) in revenue. Overall, retailers sold approximately 297.6 million computer and video games last year.

In 2008, family-friendly video games once again dominated the market, with games that the Entertainment Software Rating Board rated “Everyone 10+” and lower accounting for over half of all sales.[1] Games rated “T” for “Teen,” meanwhile, accounted for 26.7 percent of all sales, while “Mature (M)” games made up only 15.9 percent of the market. Underscoring the trend, the “Family Entertainment” video game category again finished the year as the most popular game genre, with more than 19 percent of all sales.

The Entertainment Software Association is the U.S. association dedicated to serving the business and public affairs needs of companies publishing interactive games for video game consoles, handheld devices, personal computers, and the Internet. The ESA offers services to interactive entertainment software publishers including a global anti-piracy program, owning the E3 Expo, business and consumer research, federal and state government relations, First Amendment and intellectual property protection efforts. For more information, please visit www.theESA.com.

The NPD Group is the leading provider of reliable and comprehensive consumer and retail information for a wide range of industries. Today, more than 1,600 manufacturers, retailers, and service companies rely on NPD to help them drive critical business decisions at the global, national, and local market levels. NPD helps clients to identify new business opportunities and guide product development, marketing, sales, merchandising, and other functions. Information is available for the following industry sectors: automotive, beauty, commercial technology, consumer technology, entertainment, fashion, food and beverage, foodservice, home, office supplies, software, sports, toys, and wireless. For more information, visit http://www.npd.com.

[1] According to NPD’s 2008 sales data, 45.3% of games were rated “E,” and 12.1% were rated “E10+.”