June 2011
Through the Looking Glass
By Billy Breuer, Account Associate
Editor: Pete Roithmayr, Executive Director Client Development, Games

The NPD Group added seven new attributes to our Retail Tracking Service in January 2011. They allow us to provide a new and interesting perspective on certain titles’ success, as well as industry performance overall. 

Here are the new attributes:

By using some of these new attributes, you can gain a deeper understanding of the types of factors that allow very different titles to be equally successful.
 
For example, IP source may be valuable to you because it allows you to identify the source from which the intellectual property began, and it tracks trends of other IPs that are moving into the video games space.  A look at historical performance of video game software shows about 20 percent of all units sold were from games based on licensed intellectual properties, while nearly 45 percent of all the units sold came from games that were new, unlicensed IPs. 

This trend was upheld in April 2011, with top-sellers Mortal Kombat and Portal 2.  Mortal Kombat, a title with a video games IP source, was the best selling title in April 2011. It has been and continues to be an iconic franchise that has gone through many reincarnations over the years.  Portal 2 is a sequel, yet it maintains its place as a new, unlicensed intellectual property, and it was the second best-selling title for the month. It offers a unique experience that has emerged out of gamers’ increasing interest in experimenting with new forms of game play.  These two very different properties produced strong sales when launched, though success was driven in very different ways.

From a slightly different perspective, we find certain genres are more likely to consist of titles based on a particular type of license rather than new IPs.  For example, nearly 80 percent of all games in the Shooter Super Genre are unlicensed intellectual properties, which helps explain the popularity of a game like Portal 2.  The Fighting Super Genre, on the other hand, is heavily weighted toward properties based on video games licenses like Mortal Kombat. For that title, over 30 percent of all units sold came from the video game IP source LTD. 

Another attribute we have added to our Retail Tracking Service is whether a game is online playable.  This attribute allows us to filter information by online capabilities.  Viewing industry performance through this lens, we see online playable games have become increasingly popular. In fact, seven of the top 10 software SKUs (including Mortal Kombat and Portal 2) in April 2011 were online playable games.

Online gaming is not the only emerging trend influencing the industry, however.  The 3D Compatible attribute offers another new way to examine gaming trends.  While the adoption of 3D TVs presents a challenge to the adoption of 3D gaming, there has been considerable growth in the availability of 3D compatible software.  In addition, consumer awareness of 3D capabilities for gaming has grown significantly in the past several months, no doubt driven by the PS3 and launch of the Nintendo 3DS. 

"As we have seen with other technologies that have transitioned from the theater to the home theater, lower prices and more content will help drive adoption of 3D," said Executive Director, Industry Analysis, Ross Rubin.  "There is clearly an opportunity to build an ecosystem of products that enable this dynamic way to experience content."

In addition to the focus on video game software performance, several of the new attributes allow for an updated look at features that contribute to the success of hardware and accessories.  For example, the Bundle Type attribute shows there has been exponential growth in the sales of accessories that are bundled with software.  In April 2011, we saw a significant year-over-year increase in accessories unit sales for the SW/ACC bundle type.  This was primarily due to popularity of the Kinect and Move.  

These new products have also led us to add a Motion Control Enabled attribute that allows us to differentiate between Motion Control Required, Motion Control Enabled, and Not Motion Control Enabled.  When we combine the Motion Control Required and Enabled attributes, we see there has been strong double-digit growth of motion control sales across all categories.

We have also modified our categories to allow us to examine sales activity among game cards.  While we still report game cards as part of the accessories category, this new structure in our database lets you focus on a specific area that can have an impact on digital gaming trends.  This also makes it possible to gain a clearer sense of digital revenue opportunities from a retail perspective.  The growth seen in this category is yet another indicator of the increasing importance of online gaming.

Have any interesting ideas for content that you would like to see in an upcoming Special Feature? 
Please contact your NPD account manager and we’ll try our best to use it!

Copyright 2011. The NPD Group, Inc. All Rights Reserved. This Special Feature, including all intellectual property rights associated herewith, is the exclusive, confidential and proprietary property of The NPD Group, Inc. and/or its affiliates ("NPD"). Any publication, dissemination or other disclosure of all or any part of this publication, without the prior written consent of NPD, is prohibited.