U.S. Video Game Sales Rise 16% on New Console Spending

Aug. 15 (Bloomberg) -- Gamescom, the world's largest video game convention, is taking place in Cologne, Germany, with over 350,000 people expected to attend. Among the fans are some of the world's top professional gamers -- fighting it out for thousands in prize money. Bloomberg's Angus Bennett reports on how playing games can make you a millionaire. (Source: Bloomberg)

U.S. sales of video-game hardware and software rose 16 percent last month as consumer spending on a new generation of consoles continued to fuel a rebound for the industry after years of decline.

U.S. retail sales of consoles, software and game accessories increased to $514.3 million from $443.1 million a year earlier, researcher NPD Group Inc. said yesterday in an e-mailed statement. Hardware led the increase, with Sony Corp. (6758) claiming another victory for its PlayStation 4 device. Software revenue declined.

The monthly report points to potential demand for the industry heading into the holiday shopping season, when a number of popular new titles will debut. Consumers in Europe are getting a first look at new games this week in Cologne, Germany, during Gamescom, the world’s largest video-game fair, which is drawing record attendance, according to its organizers.

“Similar to the pattern seen in seven out of the last nine months, strong growth in hardware sales offset declines in software sales,” Liam Callahan, an NPD analyst, said in the statement.

Sales of hardware, including Sony’s PlayStation 4 and Microsoft Corp. (MSFT)’s Xbox One, doubled to $198.8 million from $99.4 million a year earlier, NPD said. Sony said on Aug. 12 that worldwide sales of the PS4 exceed 10 million units, marking the fastest growth ever for its PlayStation devices. PS4 was the No. 1 in sales for the seventh consecutive month, the company said, without providing monthly sales figures.

July software sales shrank 15 percent to $178.2 million, NPD said, reflecting a drop in purchases of older-generation games, along with restrained spending on new titles.

New Games

Michael Pachter, an analyst with Wedbush Securities in Los Angeles, said before the release that the schedule for new releases was light. He forecasts growth to resume in the final three months of the year, when games for the new machines make up for declining sales for older ones.

The top selling games for the month were Sony’s The Last of Us for PlayStation and Minecraft for both older Sony and Microsoft machines.

PS4 sales, which have been in the lead since the new generation consoles were released last year, are running about double the 5 million Xbox One units sold, Bloomberg Intelligence analyst Jitendra Waral wrote on Aug. 13.

Sony said yesterday it led Microsoft in July sales by “a considerable margin” and was No. 1 in sales for the seventh straight month, without providing exact figures.

Microsoft said in July that a lower-priced Xbox One, now comparable to the PS4, has boosted sales. Sony is demonstrating a larger number of exclusive titles at Gamescom, which may help the Tokyo-based company to outpace Microsoft’s console sales, Waral said.

To contact the reporter on this story: Sonali Basak in New York at sbasak7@bloomberg.net

To contact the editors responsible for this story: Anthony Palazzo at apalazzo@bloomberg.net Rob Golum, Ben Livesey

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