Lies, Damn Lies…

Statistics are vital to understanding or planning the release of a game, but we regularly see them terribly abused for the purposes of an attention-grabbing headline, or perhaps simply misunderstood.

The most common one in our industry at the moment is ‘Games industry sales continue to slide’ or similar.

Is that true? There is strong evidence to suggest otherwise, but the trouble is we don’t really know. If they were to say ‘New boxed retail game sales continue to be eroded by the rise of online and pre-owned sales’ it might be more accurate, or even ‘New game sales at retail continue to slide’ – but they don’t sound sufficiently apocalyptic, and don’t roll off the tongue.

Most of the articles I have seen do go on to make the distinction about retail sales in the text, but it is the headlines that get remembered; that get regurgitated by those outside our industry.

COMMON GROUND

The real problem is that there isn’t a common reliable source of industry statistics that covers all the relevant sectors. We have NPD, but that only covers a small subset of US retailers. Not including Walmart and other mainstream retailers tends to bias their figures towards ‘core’ games.

They make an allowance for retailers like Walmart, but from my experience there is a significant discrepancy between their figures and the actual sales for broad games like RollerCoaster Tycoon and Thrillville, where a great many of the sales of such games are in retailers like Walmart, so the actual sales are much higher.

We have the excellent VGChartz.com, but again that only currently has figures for retail sales, so it is quite hard to refute the bold headlines with hard industry-wide sales figures.

EA have made bold statements, including that over half of their revenues now come from online, but we are still left with a mix of speculation and anecdote for the rate of growth of our industry.

As always there is a devil in the detail. From all available figures (including NPD), sales of PS3 and 360 console hardware units have been steady, if not increasing. Wii sales have fallen dramatically, but then sales of the iPad have more than made up for this.

Don’t get me wrong – I think the two events are largely coincidental, with the Wii reaching the end of its natural life as people buy HDTVs.

Most cumulative figures show sales of new shrink-wrapped games at retail are down by about 10 per cent from last year.

Using US figures from NPD, that’s down to around $400m.

Now iOS sales alone are reported to have been over $2bn worldwide in the last year, of which about 20 per cent are games (from Tech Crunch), or about $400m. Let’s conservatively assume only half of those are in the US, but that figure alone swamps the 10 per cent decay in retail sales.

ONLINE SALES

That is without allowing for PSN, Xbox Live, Steam, and the reportedly huge claims for web-based games through Facebook. And remember that online sales are generally more valuable as more of that money goes to the developers and publishers.

I’m not going to put a figure on what I think the growth is, as that is likely to be just as inaccurate as the headlines I started this piece by criticising. But I will say there is strong evidence our industry is continuing to grow.

Nevertheless, we do need to have centralised statistics as this is a huge help to planning and forecasting for us all. Hopefully NPD or VGChartz will do so.

Or maybe someone else is already on the case. Our industry has not stopped changing since I have been a part of it – for a shocking 29 years – and now is no different.