2005 U.S. Video Game Sales Topped $10.5 Bln

The NPD Group says that retail sales for video game hardware, titles, and accessories in the United States topped $10.5 billion dollars during 2005, a record year despite weak sales of console systems. The figures represent a six percent increase over the $9.9 billion in sales racked up in 2004, and a $200 increase over the previous record year, 2002.

The portable gaming market led the way, selling more than $1 billion in software alone and generating $1.4 billion on the hardware side. In percentage terms, NPD says the portable game segments of hardware, software, and accessories respectively increased 96, 42, and 88 percent over 2004. While the Nintendo DS and Sony PSP certainly fueled the portable market, Nintendo’s Game Boy Advance continued to drive the portable market, with GBA software representing 64 percent of all portable software units sold and over half of all portable software revenue for 2005.

The console market, conversely, offered up disappointing figures as consumers deferred purchases while waiting for next-generation console systems, and hardware shortages of the first next-generation box out the door (Microsoft’s Xbox 360) further muffled sales. Compared to 2004, console hardware, software, and accessories declined by 3, 12, and 8 percent respectively.

“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 with the NPD Group. “The real story for 2005 was the incredible expansion of portable gaming. The GBA continued to realize stellar sales, and the introduction of the DS and PSP to the market brought older gamers to the portable format.”