Video Games

Video games spring back on strong console sales

The multiyear losing streak by the video game industry finally came to an end in 2014, though any celebrations may be muted.

Total sales of video game hardware and software came in at $13.1 billion in the U.S., a one percent increase over the 2013 totals, according to The NPD Group. That's a small bump, but it's the first time the industry has seen an overall sales increase since 2008.

New hardware was directly responsible for the achievement. Consumers bought Microsoft's Xbox One and Sony's PlayStation 4 in significant numbers last year, with sales totaling $5.07 billion, a 20 percent increase from 2013.

A customer poses with three new Xbox One video games after purchasing them in Los Angeles.
Patrick T. Fallon | Bloomberg | Getty Images

While NPD doesn't disclose console sales, Microsoft, in a statement citing NPD data, announced that the Xbox One (which was deeply discounted during the holidays) was the industry's best-selling system in November and December.

"[The] weekly average sales during these months outpaced Xbox 360 by 50 percent at the same point in its life cycle," the company said.

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Microsoft also announced a new, apparently open-ended, promotion, lowering the price of the Xbox One to $349.

Despite good news in hardware, software sales at brick and mortar retailers continued to fall short, dropping 13 percent to $5.3 billion. That's a number that's unlikely to see a long-term recovery, either, as console manufacturers increasingly promote digital downloads of new titles and add-on content for games. Weakness among sales of Xbox 360 and PlayStation 3 games contributed to the number.

The widespread number of game bundles—hardware systems that were sold with one or two included big titles—also likely impacted the sale of standalone games, as buyers didn't feel the need to buy additional software with their gifts.

The $13.1 billion in 2014 is far short of the $21.4 billion in industry sold in 2008, but it's a much different gaming world today. At that time, the Nintendo Wii was a full-fledged phenomenon, attracting a new audience to the video game world, and there was virtually no competition from mobile game systems from Apple or Google.

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Activision was the year's big winner among major publishers. Its "Call of Duty: Advanced Warfare" was the best-selling game of both December and the year. The company also held the No. 3 and No. 10 slots in the year's top-selling games with "Destiny" and "Call of Duty: Ghosts."

Electronic Arts had two games in the annual top 10. "Madden NFL 15" was the second-best selling title, while "FIFA 15" came in at ninth. Take-Two Interactive Software also had two: "Grand Theft Auto V" in fourth and "NBA 2K15" in seventh.

NPD also does not supply exact sales figures for software titles.

The sales numbers follow Tuesday's announcement by game retailer GameStop that same-store sales were up 4.4 percent in December, driven by high demand for "Call of Duty," "Grand Theft Auto V" and "Far Cry 4."

"During the holiday period, consumer demand for video games was strong, resulting in new software sales growth," said GameStop CEO Paul Raines. "We expect that trend to continue into the first quarter."

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