Market Outlook and News
Issue: Volume: 27 Issue: 3 (March 2004)

Market Outlook and News

The 2003 US sales figures announced by the ESA and compiled by the NPD Group, a global market information company that measures product movement and consumer behavior, indicate the majority of games sold were rated E for Everyone (54 percent), followed by T for Teen (30.5 percent), and M for Mature (11.9 percent). In 2002, E-rated games accounted for 55.7 percent of games sold, whereas T-rated and M-rated games made up 27.6 percent and 13.2 percent of games sold, respectively. Of the top 20 best-selling console games, 70 percent were rated E or T; and, an impressive 90 percent of the top 20 computer games were rated either E or T.

In 2003, game sales in the US reached a new pinnacle: Combined sales for computer and video games exceeded $7 billion for the first time. Overall, US sales of console games totaled $5.8 billion (186.4 million units), and computer games accounted for $1.2 billion (52.8 million units) in sales. In 2002, game software sales totaled $6.9 billion, with console games contributing $5.5 billion in sales, and computer games adding $1.4 billion.
Recent trends indicate an increased interest in Teen- rather than Mature-rated games.

Also in 2003, a record number of console video games exceeded the 500,000 or 1-million mark in terms of units sold. A record nine console games sold more than one million units—all of which were rated E or T. Thirty-nine console games sold more than 500,000 units, and 83 titles exceeded 250,000 units.
A lion's share of the console games purchased in the US throughout 2003 fall into the action genre.

ESA president Douglas Lowenstein suggests that, based on 2003's record number of blockbuster hits, the popularity of video games is strong and growing. And, he believes, the industry is producing a broad array of entertaining content appropriate for and appealing to people of all ages. Lowenstein also notes that entertainment software continues to outpace the annual growth posted by the movie and music industries.

According to numbers compiled by the NPD Group, in fact, total game software sales in 2003 grew while both the movie and music industries reported losses compared with 2002 sales, according to estimates by Exhibitor Relations and Nielsen SoundScan respectively. —Courtney E. Howard

Atari (Los Angeles) entered into an agreement to sell its Internet address to Games, Inc. for $1.125 million in cash and stock. The sale, expected to close at the end of the month, also includes Games' acquisition of digital licenses and sublicenses for such games as Monopoly, Scrabble, Risk, Battleship, Boggle, and Yahtzee. A developer of video production and conversion technology, Focus Enhancements (Campbell, CA) made public not only an agreement to acquire Visual Circuits, maker of networked digital video systems, but also its intent to acquire COMO Computer & Motion, a company in Germany that makes video content management and processing solutions. Alias (Toronto) announced that it is in discussions with a private equity investment firm regarding the acquisition of Alias from Silicon Graphics Inc. (SGI). As a result of the transaction, Alias would become an independent entity, but the company's management team, organization, services, support, and product availability would not be changed. Pixar (Emeryville, CA), having ended discussions with The Walt Disney Company to extend their existing five-picture deal, will begin discussions with other studios to distribute its films beginning in 2006. After completing the final two films under the current agreement, The Incredibles in 2004 and Cars in 2005, Pixar intends to retain full ownership of its future productions. —CEH