NPD stupidity


January’s NPD figures have been (at least partially) released, and it’s hard to resist getting swept up in the numbers hysteria.  Personally I’ve never liked numbers, because they allow very ignorant people to spin everything with no actual insight.  Insight is much more important than figures and factoids, but that’s not the only reason I think the NPD is especially questionable these days…

For one, their monthly stats are only for the USA, and even then they only include 65% of retailers, omitting big chains such as Sam’s Club and Toys R Us.  They do include Amazon, though, which is extremely important in 2014.  But 65% isn’t a lot, no matter which way you slice it.

Secondly, NPD only tracks new retail game sales, which means they don’t they don’t include the following things:

  • Digital distribution (Steam, GOG, PSN, Xbox Live, Origin, etc.)
  • Used game sales
  • Subscriptions
  • Mobile games
  • Rentals
  • Social Network games

They put this disclaimer at the bottom of their image, but it seems suspiciously missing from most people who are regurgitating the matter:



I’m not saying NPD’s numbers are wrong, they’re just much less comprehensive than people assume.  What is the point of tracking software sales if you can’t include Steam or any other digital sales?  That’s like tracking the number of kids who are in school, but neglecting to include elementary schools, private schools, or Catholic schools.


Beware false prophets

Doomsayers like Nintendo critic Sean Malstrom love to look at NPD numbers and compare them to past generations, saying that the PS4 is simply following the failure trajectory of the PS3 at this rate and that supply constraints don’t indicate high demand.  I wasn’t surprised to find that NeoGAF is similarly struggling to handle the fresh information, with plenty of people wondering whether the industry is healthy at all.

Aside from digital sales (full games and DLC), if you were to factor in the rest of the world, online subscriptions (World of Warcraft, Eve Online, Final Fantasy 14, etc.), free-to-play games (League of Legends, Team Fortress 2, DOTA 2, Path of Exile, etc.) mobile games (Candy Crush Saga, Clash of Clans, Hay Day, etc.), and rentals and social network games, you would easily add billions of dollars to each fiscal quarter.  It’s ridiculous to judge January’s NPD numbers as if they were even half of the whole story.  Each of these neglected markets is massive, and you can’t talk about the health of the industry without them, especially since they’re the sections of the industry that are growing the fastest.

No doubt the PS4 is selling twice as much as the Xbox One — the numbers are surely accurate — but before anyone says the PS4 isn’t doing better than the PS3, remember the following:

  • It isn’t being sold at a loss (Sony is making slight profit off of each one, unlike the PS3 which cost Sony way more than it was sold for)
  • PS+ subscriptions are going way up, very quickly (major ongoing monthly profit)
  • PS4 hasn’t launched in Japan (supply has presumably been stocked up for that, making it less available everywhere else)

So before you weep for console manufacturers, publishers, developers, or gamers, or say woe is gaming, remember that the game industry is easily bigger than Hollywood, and that’s not even including some of the biggest sources of income that it’s raking in.

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