The NPD Group Reports Annual 2005 U.S. Video Game Industry Retail Sales; Video Game Industry Experiences Record-Breaking Year Thanks in Large Part to Significant Growth of Portable Market

Business Wire, Jan 17, 2006

PORT WASHINGTON, N.Y. -- According to leading marketing information provider, The NPD Group, annual 2005 U.S. retail sales of video games, which includes console and portable hardware, software and accessories, saw sales of over $10.5 billion - a six percent increase over the $9.9 billion generated in 2004 and another industry record, exceeding the previous record-breaking $10.3 billion generated in 2002.

Sales set a new record thanks to the strong portable game market, which offset the declines in the console market. For the second year in a row, sales of portable software titles broke the $1 billion mark, generating $1.4 billion in the U.S. Portable game hardware, software and accessory categories saw respective dollar increases of 96 percent, 42 percent and 88 percent over 2004.

The console market did not fare as well, due in large part to hardware shortages, delays in the release of highly anticipated software titles and consumer anticipation of next-generation hardware. For 2005, console hardware, software and accessories saw respective dollar sales declines of three percent, 12 percent and eight percent compared to 2004.

While strong sales of hardware, software and accessories for the Nintendo DS and Sony PSP helped drive another record breaking year for the industry, the backbone of the portable market continues to be Nintendo's GBA. In 2005, GBA software represented 64 percent of total portable software units sold and 52 percent of total portable software dollar sales.

"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, 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."

Annual 2005 Top 10 Video Game Titles, Ranked by Units Sold
----------------------------------------------------------------------
RANK           TITLE           PLATFORM     PUBLISHER    RELEASE  ARP
                                                          DATE
----- ------------------------ --------- --------------- ------- -----
   1  MADDEN NFL 06               PS2    ELECTRONIC ARTS AUG-05   $46
----- ------------------------ --------- --------------- ------- -----
   2  POKEMON                     GBA    NINTENDO OF     APR-05   $34
      EMERALD                            AMERICA
----- ------------------------ --------- --------------- ------- -----
   3  GRAN TURISMO 4              PS2    SONY            FEB-05   $49
                                         COMPUTER ENT.
----- ------------------------ --------- --------------- ------- -----
   4  MADDEN NFL 06               XBX    ELECTRONIC ARTS AUG-05   $47
----- ------------------------ --------- --------------- ------- -----
   5  NCAA FOOTBALL 06            PS2    ELECTRONIC ARTS JUL-05   $48
----- ------------------------ --------- --------------- ------- -----
   6  STAR WARS:                  PS2    LUCASARTS       NOV'05   $47
      BATTLEFRONT II
----- ------------------------ --------- --------------- ------- -----
   7  MVP BASEBALL 2005           PS2    ELECTRONIC ARTS FEB-05   $29
----- ------------------------ --------- --------------- ------- -----
   8  STAR WARS EPISODE III:      PS2    LUCASARTS       MAY-05   $47
      REVENGE OF THE SITH
----- ------------------------ --------- --------------- ------- -----
   9  NBA LIVE 06                 PS2    ELECTRONIC ARTS SEP-05   $44
----- ------------------------ --------- --------------- ------- -----
  10  LEGO STAR WARS              PS2    EIDOS           MAR-05   $37
----- ------------------------ --------- --------------- ------- -----
Source: The NPD Group / Point-of-Sale

About The NPD Group, Inc.

Since 1967 The NPD Group has provided reliable and comprehensive consumer and retail information for a wide range of industries. Today more than 1,400 manufacturers and retailers rely on NPD to help them better understand their customers, product categories, distribution channels and competition in order to help guide their businesses. Information from The NPD Group is available for the following major vertical sectors: apparel, appliances, automotive, beauty, consumer electronics, food and beverage, foodservice, footwear, home improvement, housewares, imaging, information technology, music, software, toys, video games, and wireless. For more information visit www.npd.com.