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[sonycowboy]

July 2004 NPD Video Game Sales Data

OVERVIEW
On Monday afternoon, NPD Funworld released the July 2004 (four-week period ending July 31, 2004) TRSTS data for U.S. console video game software retail sales. Total sales were $350 million, down 8% sequentially from June’s $380 million, but up 27% compared to July 2003’s $275 million. Year-to-date sales are $2,429 million compared with 2003 year-to-date sales of $2,323 million (a year-over-year increase of 5%).

The overall sales figures were significantly higher than our expectations of $310 million (up 13%). We believe that the higher sales level is due to a combination of the mid-May price cut on the PS2 to $149 and the release of several blockbuster games in June and July. We also believe that a handful of games benefited from strong marketing campaigns.

July sales were led by continued strong sales of Activision’s Spider-Man 2 (PS2, Xbox, GC, GBA, PC) and Atari’s DRIV3R (PS2 and Xbox), both released in June. The top July releases were Electronic Arts’ NCAA Football 2005 (PS2, Xbox, GC) and Take-Two’s ESPN NFL 2K5 (PS2, Xbox). We continue to be optimistic that a number of blockbuster titles expected over the back half of the year will provide a strong finish for 2004, and will allow double-digit sales growth for the year. We expect that these strong holiday sales will allow U.S. console software sales to grow 10% year-over-year (up from 5% in 2003), and believe that the strong up tick in sales growth in July will be repeated in future months, as a very strong slate of games is scheduled to be released over the rest of the year.

So far in 2004, ASPs have held steady, with ASPs through July down only 1% ($30.01 year-to-date, compared to last year’s $30.36 through July). Unit sales through July are up 6% (from 76.5 million to 80.9 million), in large part due to this month’s unit volume increase of 31% (almost 3 million units higher than last year). Over the period January through July 2003, ASPs were down by 7% compared with the same period in 2002, with prices holding steady over the last five months of the year as sales were dominated by a greater mix of newly released, full-priced games. Our 10% growth forecast presumes an increase of 23% in unit sales, offset by a 12% decline in ASPs. We believe that it is likely that ASPs for 2004 will decline by less than our forecast, and may end up being close to flat for the year. Should this occur, it is probable that overall console sales will exceed our forecast, especially given the large contribution expected later in the year from games such as Grand Theft Auto: San Andreas, Halo 2, Gran Turismo 4,
Mortal Kombat: Deception, and several others.

There were 10 games selling more than 100,000 units apiece in July vs. our estimate of seven and compared to four last year. The top 200 games (out of 3,000 games sold) captured 60% of unit sales and 74% of dollar sales, compared with 59% of unit sales and 68% of dollar sales in June, while the top 10 captured 30% of dollar sales in July versus 17% last month. These figures reflect the relative sales strength for new releases, and we expect higher contributions from the top sellers for the balance of 2004. The average selling price of all games (console and handheld, legacy and current generation) was $28.08, down 3% from last year’s $28.92 ASP. We expect a greater proliferation of catalog games and a handful of discounted titles (notably, ESPN NFL 2K5) to keep ASPs at this level over the next two months, with ASPs ranging between $29 and $30, followed in October by an increase in ASPs.

ANALYSIS
In our July preview note of NPD Funworld data dated August 13, 2004, we projected retail sales figures for the seven companies we cover. Our models typically assume sell-through of approximately 50% of the units shipped within the first four weeks of release. The following is an analysis of each company’s results.

Acclaim Entertainment (AKLM—Hold)
Releases during July: None.
July Retail Sales--$4 million
WMS Estimate--$5 million
Acclaim’s market share decreased sequentially from 1.7% to 1.3%, as did its retail sales from $6 million to $4 million (compared with $6 million last July). Acclaim's sales were lead by SHOWDOWN: Legends of Wrestling, which sold 30,000 units in its second month of release. All-Star Baseball, NBA Jam, ATV Quad Power Racing, Burnout, Worms, Legends of Wrestling, and Turok led older catalog sales. The company’s ASP for all units sold was $22.31, down 9%
from last year’s $24.60.

Activision (ATVI—Buy and Focus List)
Releases during July: None.
July Retail Sales--$51 million
WMS Estimate--$45 million
Activision’s market share increased sequentially from 11.3% last month to 14.6% in July, as its retail sales increased from $43 million to $51 million (compared with $11 million last July). Spider-Man 2 sold an impressive 867,000 units combined versus our estimate of 600,000 units (on top of the 442,000 units sold last month). Shrek 2 again sold well with 129,000 units combined in its third month of release, although somewhat lower than our expected 200,000 units figure. Activision’s ASP for all units sold was $37.97, up 46% from last year’s $26.09 reflecting the large contribution of the full priced Spider-Man 2 to the mix. We expect Spider-Man 2 and Shrek 2 to continue to sell well throughout the balance of the year.

Atari (ATAR—Buy)
Releases during July: None.
July Retail Sales--$19 million
WMS Estimate--$15 million
Atari’s market share decreased sequentially from 6.8% last month to 5.5%, with retail sales declining from $26 million to $19 million (compared with $16 million last July). Sales were led by DRIV3R which sold 180,000 units combined compared with our estimate of 200,000 units in its second month (on top of the 238,000 units sold last month). Given the relatively poor reviews for DRIV3R, we do not expect significant incremental sales over the balance of the year, and expect that the game will require markdowns in order to clear initial inventories shipped. Catalog sales of
Backyard Baseball and various Dragon Ball Z titles sold well. Atari’s ASP for all units sold was $29.35, up 10% from last year’s $26.66. This reflects the relative higher contribution to sales from DRIV3R compared to last year.

Electronic Arts (ERTS—Buy)
Releases during July: NCAA Football 2005 (PS2, GC, Xbox), Catwoman (PS2, Xbox, GC, GBA, PC).
July Retail Sales--$78 million
WMS Estimate--$75 million
Electronic Arts’ market share increased sequentially from 16.2% last month to 22.2%, and its retail sales increased substantially from $61 million last month to $78 million in July (compared to $59 million last July). NCAA Football 2005 sold an impressive 806,000 units combined compared with our estimate of 800,000 units, while Catwoman performedworse than any EA title in recent memory, with fewer than 20,000 units sold. The company's other catalog titles performed much better than our expectations. The company’s ASP for all units sold was $36.61, down 4% from lastyear’s $38.24, but still much higher than the industry average, reflecting Electronic Arts’ ability to maintain a favorablemix of sales toward higher-priced new releases.

Midway Games (MWY—Hold)
Releases during July: None.
July Retail Sales--$7 million
WMS Estimate--$10 million
Midway’s market share decreased sequentially from 3.2% last month to 2.1%, as its retail sales declined from $12million to $7 million (compared with $5 million last July). Psi-Ops sold only 35,000 units in its second month of release,notwithstanding generally strong reviews. The company's sales again were led by its catalog, with NBA Ballersselling another 45,000 units. Midway’s ASP for all units sold was $24.77, up 4% from last year’s $23.90, and reflecting
generally weak contribution from full-priced games.

Take-Two Interactive (TTWO—Buy and Focus List)
Releases during July: ESPN NFL 2K5 (PS2, Xbox).
July Retail Sales--$26 million
WMS Estimate--$19 million
Take-Two’s market share increased from 4.5% to 7.5%, as its retail sales grew impressively from $17 million in Juneto $26 million in July (compared with $12 million last July). ESPN NFL 2K5 sold a surprising 792,000 units combined compared with our estimate of 300,000 units in its first 12 days of release. The upside from sales of this game accounted for all of Take-Two’s upside to our expectations, as its catalog sales came in about in line with ourestimate. Take-Two’s ASP for all units sold was $20.97, down 25% with last year’s $27.80 reflecting the largecontribution from sales of its $20 ESPN game this year. Notwithstanding the impressive performance in July, we
continue to believe that many investors are focused on the release of the next installment in the GTA series, GTA:San Andreas, in October.

THQ (THQI—Hold)
Releases during July: None.
July Retail Sales--$17 million
WMS Estimate--$20 million
THQ’s market share decreased from 7.1% to 4.8%, as its retail sales declined from $27 million to $17 million(compared with $18 million last July). Full Spectrum Warrior sold 44,000 units in its second month compared with our estimate of 100,000 units (on top of the 190,000 units sold last month). As a result, sales were slightly lower than we expected. THQ’s ASP for all units sold was $22.90, down 6% from last year’s $24.39, reflecting a greater contribution from low priced GBA games. The company had 24 titles sell 10,000 units or more, in line with our estimate of 24.

CONCLUSION
July overall retail sales were significantly higher than our expectations, coming in at $350 million compared to our estimate of $310 million. We expect double-digit sales growth to continue through 2004, as the industry facesrelatively easy comparisons to last year and an outstanding lineup of games over the balance of the year. Wecontinue to expect overall industry growth of 10% for the full year as the console installed base continues to expand,driven by strong sales of several blockbuster games over the rest of the year (such as Sony’s Gran Turismo 4, Take-
Two’s GTA San Andreas, and Microsoft‘s Halo 2). We expect video game sales in August to be driven by the newrelease of Electronic Arts’ Madden NFL 2005 (PS2, Xbox, GC, PSX, GBA, PC), as well as catalog sales of thismonth’s top games.

Activision’s, Atari’s and Take-Two’s results were much better than we expected. We expect Activision and Take-Two shares to reflect the strong performance in July, and do not expect a significant market reaction to Atari’s results. Acclaim’s, Electronic Arts’, Midway’s, and THQ’s results were about in line with our estimates and we do not expect significant movement in the share of any of these companies as a result of the data. We expect that investors will continue to focus on the key releases from each company over the balance of the year and think that our “Buy” rated companies (ATVI, ATAR, ERTS, and TTWO) are in good position to maintain or grow market share over the balance of the year. We expect shares of each “Buy” rated stock to appreciate over the next several months.

July 2004 Market Share Rankings (Top 20 Companies)
Total (millions) 350 $
Company Projected $'s Market Share
1 ELECTRONIC ARTS 78 $ 22.2%
2 ACTIVISION 51 $ 14.6%
3 NINTENDO OF AMERICA 35 $ 9.9%
4 TAKE 2 INTERACTIVE (CORP) 26 $ 7.5%
5 ATARI 19 $ 5.5%
6 THQ 17 $ 4.8%
7 KONAMI OF AMERICA 13 $ 3.7%
8 NAMCO 13 $ 3.6%
9 SONY (CORP) 11 $ 3.2%
10 CAPCOM USA 11 $ 3.0%
11 MICROSOFT (CORP) 9 $ 2.6%
12 UBISOFT (CORP) 8 $ 2.4%
13 VIVENDI UNIVERSAL (CORP) 8 $ 2.3%
14 MIDWAY 7 $ 2.1%
15 MAJESCO 6 $ 1.8%
16 SEGA OF AMERICA 5 $ 1.5%
17 ACCLAIM ENTERTAINMENT (CORP) 4 $ 1.3%
18 EIDOS INTERACTIVE (CORP) 3 $ 0.8%
19 SQUARE ENIX INC (CORP) 3 $ 0.8%
20 BUENA VISTA GAMES 2 $ 0.7%
Top 20 Market Share 94.3%
Source: NPD Funworld.

 

[Lukas]

stop editing your thread in order to bump it, no one cares

 

[AirBrian]

July 2004 Market Share Rankings (Top 20 Companies)
Total (millions) 350 $
Company Projected $'s Market Share
1 ELECTRONIC ARTS 78 $ 22.2%
2 ACTIVISION 51 $ 14.6%
3 NINTENDO OF AMERICA 35 $ 9.9%
4 TAKE 2 INTERACTIVE (CORP) 26 $ 7.5%
5 ATARI 19 $ 5.5%
6 THQ 17 $ 4.8%
7 KONAMI OF AMERICA 13 $ 3.7%
8 NAMCO 13 $ 3.6%
9 SONY (CORP) 11 $ 3.2%
10 CAPCOM USA 11 $ 3.0%
11 MICROSOFT (CORP) 9 $ 2.6%
12 UBISOFT (CORP) 8 $ 2.4%
13 VIVENDI UNIVERSAL (CORP) 8 $ 2.3%
14 MIDWAY 7 $ 2.1%
15 MAJESCO 6 $ 1.8%
16 SEGA OF AMERICA 5 $ 1.5%
17 ACCLAIM ENTERTAINMENT (CORP) 4 $ 1.3%
18 EIDOS INTERACTIVE (CORP) 3 $ 0.8%
19 SQUARE ENIX INC (CORP) 3 $ 0.8%
20 BUENA VISTA GAMES 2 $ 0.7%
Top 20 Market Share 94.3%
Source: NPD Funworld.

And EA's market share will be even higher in August with Madden. They are an unstoppable force.

stop editing your thread in order to bump it, no one cares

If you don't care about a thread you can *gasp* not post in it. But thanks for telling us that no one cares.

 

[Meier]

Who would have ever guessed Majesco would make more money in any month than Sega? The power of the GBA! Also ironic that Sega's potentially best-selling (unit wise) game this gen, isnt even being published by them, so technically isnt even one of their releases.

 

[human5892]

stop editing your thread in order to bump it, no one cares

Was this 0.5432 of a dumb post? I think it was at least a 0.5.

 

[sonycowboy]

Was this 0.5432 of a dumb post? I think it was at least a 0.5.

And there wasn't even an edit, it was just an initial post. LOL.

The guy breaks the hardware sales and thinks he's the master of the universe.

 

[BlackClouds]

Who would have ever guessed Majesco would make more money in any month than Sega? The power of the GBA! Also ironic that Sega's potentially best-selling (unit wise) game this gen, isnt even being published by them, so technically isnt even one of their releases.

I'm pretty sure SOA would've had a tough time convincing retailers to stock its game in large enough numbers to be worthwhile. Too many large stores didn't even stock ESPN Baseball (and many other games recently released by them) or didn't reorder like the Best Buy's in my area. I wonder what's exactly the problem. Whatever the reason, I'm sure it's worth it for Sega to play an extra fee to get wider distribution. Works for Take Two also, since they get all the marketshare figures. Same thing with THQ with the Sonic GBA games. I wonder what would Sega's figures be like if they were able to publish those games by themselves. Far as I'm concerned, if Sega makes money of it, it's a Sega game, even if others get a slice.

As an odd note, I cannot find take two or globalstar on the box of the Xbox version of 2k5, nor in the ads. But Sega is prominently on the box.

 

[Izzy]

up 27% compared to July 2003’s $275 million. Year-to-date sales are $2,429 million compared with 2003 year-to-date sales of $2,323 million (a year-over-year increase of 5%).

We expect that these strong holiday sales will allow U.S. console software sales to grow 10% year-over-year (up from 5% in 2003)

Hell yes! Where is that guy from the BOA who said the market was declining?

 

[Alcibiades]

I'm pretty sure SOA would've had a tough time convincing retailers to stock its game in large enough numbers to be worthwhile. Too many large stores didn't even stock ESPN Baseball (and many other games recently released by them) or didn't reorder like the Best Buy's in my area. I wonder what's exactly the problem. Whatever the reason, I'm sure it's worth it for Sega to play an extra fee to get wider distribution. Works for Take Two also, since they get all the marketshare figures. Same thing with THQ with the Sonic GBA games. I wonder what would Sega's figures be like if they were able to publish those games by themselves. Far as I'm concerned, if Sega makes money of it, it's a Sega game, even if others get a slice.

As an odd note, I cannot find take two or globalstar on the box of the Xbox version of 2k5, nor in the ads. But Sega is prominently on the box.

that's true, but I can guarantee, that stores would be WANTING to get their hands on 2k5, no matter who the publisher, considering the sales this is doing at $20... maybe it was wise to get help from Take-Two, especially early on, since replenishments for early inventory would probably move in smoother than if Sega had done this (not to mention it's during the crucial pre-Madden sales period), but in the longer term, like November and December, it's going to be stores beggin to get this game in...

Strong GCN supporters:

Activision (ATVI—Buy and Focus List)
Releases during July: None.
July Retail Sales--$51 million
WMS Estimate--$45 million
Activision’s market share increased sequentially from 11.3% last month to 14.6% in July, as its retail sales increased from $43 million to $51 million (compared with $11 million last July). Spider-Man 2 sold an impressive 867,000 units combined versus our estimate of 600,000 units (on top of the 442,000 units sold last month). Shrek 2 again sold well with 129,000 units combined in its third month of release, although somewhat lower than our expected 200,000 units figure. Activision’s ASP for all units sold was $37.97, up 46% from last year’s $26.09 reflecting the large contribution of the full priced Spider-Man 2 to the mix. We expect Spider-Man 2 and Shrek 2 to continue to sell well throughout the balance of the year.

Electronic Arts (ERTS—Buy)
Releases during July: NCAA Football 2005 (PS2, GC, Xbox), Catwoman (PS2, Xbox, GC, GBA, PC).
July Retail Sales--$78 million
WMS Estimate--$75 million
Electronic Arts’ market share increased sequentially from 16.2% last month to 22.2%, and its retail sales increased substantially from $61 million last month to $78 million in July (compared to $59 million last July). NCAA Football 2005 sold an impressive 806,000 units combined compared with our estimate of 800,000 units, while Catwoman performedworse than any EA title in recent memory, with fewer than 20,000 units sold. The company's other catalog titles performed much better than our expectations. The company’s ASP for all units sold was $36.61, down 4% from lastyear’s $38.24, but still much higher than the industry average, reflecting Electronic Arts’ ability to maintain a favorablemix of sales toward higher-priced new releases.

not-so-strong GCN supporters:

Acclaim Entertainment (AKLM—Hold)
Releases during July: None.
July Retail Sales--$4 million
WMS Estimate--$5 million
Acclaim’s market share decreased sequentially from 1.7% to 1.3%, as did its retail sales from $6 million to $4 million (compared with $6 million last July). Acclaim's sales were lead by SHOWDOWN: Legends of Wrestling, which sold 30,000 units in its second month of release. All-Star Baseball, NBA Jam, ATV Quad Power Racing, Burnout, Worms, Legends of Wrestling, and Turok led older catalog sales. The company’s ASP for all units sold was $22.31, down 9%
from last year’s $24.60.

Atari (ATAR—Buy)
Releases during July: None.
July Retail Sales--$19 million
WMS Estimate--$15 million
Atari’s market share decreased sequentially from 6.8% last month to 5.5%, with retail sales declining from $26 million to $19 million (compared with $16 million last July). Sales were led by DRIV3R which sold 180,000 units combined compared with our estimate of 200,000 units in its second month (on top of the 238,000 units sold last month). Given the relatively poor reviews for DRIV3R, we do not expect significant incremental sales over the balance of the year, and expect that the game will require markdowns in order to clear initial inventories shipped. Catalog sales of
Backyard Baseball and various Dragon Ball Z titles sold well. Atari’s ASP for all units sold was $29.35, up 10% from last year’s $26.66. This reflects the relative higher contribution to sales from DRIV3R compared to last year.

THQ (THQI—Hold)
Releases during July: None.
July Retail Sales--$17 million
WMS Estimate--$20 million
THQ’s market share decreased from 7.1% to 4.8%, as its retail sales declined from $27 million to $17 million(compared with $18 million last July). Full Spectrum Warrior sold 44,000 units in its second month compared with our estimate of 100,000 units (on top of the 190,000 units sold last month). As a result, sales were slightly lower than we expected. THQ’s ASP for all units sold was $22.90, down 6% from last year’s $24.39, reflecting a greater contribution from low priced GBA games. The company had 24 titles sell 10,000 units or more, in line with our estimate of 24.

Take-Two Interactive (TTWO—Buy and Focus List)
Releases during July: ESPN NFL 2K5 (PS2, Xbox).
July Retail Sales--$26 million
WMS Estimate--$19 million
Take-Two’s market share increased from 4.5% to 7.5%, as its retail sales grew impressively from $17 million in Juneto $26 million in July (compared with $12 million last July). ESPN NFL 2K5 sold a surprising 792,000 units combined compared with our estimate of 300,000 units in its first 12 days of release. The upside from sales of this game accounted for all of Take-Two’s upside to our expectations, as its catalog sales came in about in line with ourestimate. Take-Two’s ASP for all units sold was $20.97, down 25% with last year’s $27.80 reflecting the largecontribution from sales of its $20 ESPN game this year. Notwithstanding the impressive performance in July, we
continue to believe that many investors are focused on the release of the next installment in the GTA series, GTA:San Andreas, in October.

Midway Games (MWY—Hold)
Releases during July: None.
July Retail Sales--$7 million
WMS Estimate--$10 million
Midway’s market share decreased sequentially from 3.2% last month to 2.1%, as its retail sales declined from $12million to $7 million (compared with $5 million last July). Psi-Ops sold only 35,000 units in its second month of release,notwithstanding generally strong reviews. The company's sales again were led by its catalog, with NBA Ballersselling another 45,000 units. Midway’s ASP for all units sold was $24.77, up 4% from last year’s $23.90, and reflecting
generally weak contribution from full-priced games.

THQ is a strong GBA supporter, but only WWE stands out at all in GCN support...

anybody notice a pattern?

Take-two was the only exception...