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Videogame Sales Hold Steady High In 2003

Retail sales of U.S. videogames, which includes portable and console hardware, software and accessories, remained largely unchanged over the previous year's record-breaking performance, according to a leading marketing information provider, the NPD Group. The console industry saw sales figures fall 2.7% to $10 billion in 2003, compared to $10.3 billion in 2002.

The PC game software industry showed signs of slowing down, with revenues from retail sales topping $1.2 billion in sales in 2003 versus $1.4 billion in 2002. The total console, portable and PC game industry was $11.2 billion, just 4% off the record $11.7 billion in 2002.

The console software and portable game software categories drove sales in 2003 with a record breaking $5.8 billion, an increase of 5.4% in overall sales when compared to $5.5 billion in 2002. Including PC games, total industry software sales were up 1.5% to $7 billion, from $6.9 billion in 2002. For 2003, console software, portable game hardware and portable game software saw unit sales increases of 14%, 15% and 19%, respectively.

The largest percentage reduction came in the console hardware category, with a 27% decline in dollar volume in 2003. However, portable hardware dollar volume was up 54% in 2003 to $750 million, from $490 million in 2002. Besides portable game accessories, which declined 11% in 2003, all other industry categories showed a markedly high increase in unit figures.

"The sales results are still quite impressive when you look at the overall industry performance during 2003," said Richard Ow, senior videogames analyst, The NPD Group. "The market has seen price cuts from console manufacturers as well as declines in retail software prices. With manufacturers and software publishers dropping prices to vie for consumer dollars, $10 billion in sales for the year is far from disappointing."

"Since a majority of the industry's growth comes from software sales, and because there are plenty of highly anticipated software titles across all platforms in 2004, we are expecting to see impressive sales figures," said Ow. "However, with the continued price gouging of both hardware and software categories, the industry's sales will be hard pressed to surpass 2003 through the remainder of the current hardware platform's life cycles."

Since 1967, The NPD Group has provided comprehensive sales and marketing information for a wide range of industries. Information from The NPD Group is available for the following major vertical sectors: apparel, appliances, automotive, beauty, cellular, consumer electronics, food and beverage, foodservice, footwear, home improvement, housewares, imaging, information technology, music, software, travel, toys and videogames. For more information, visit www.npd.com.

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