Video Game Sales Grow at Breakneck Pace
US video game sales continue to defy expectations of a post-pandemic slump as the industry experienced another month of impressive growth.
The NPD Group, a market research company that tracks and analyzes the video game industry, recently released their October 2021 report, featuring another month of record-breaking sales data. The report, highlighted by VentureBeat, notes that consumer spending on video game hardware, content and accessories grew 16% year-over-year, reaching an October record of $4.4 billion.
Hardware showed the strongest growth at $472 million, an 82% rise compared to last year’s October figure, followed by an 11% rise in software sales and a 5% increase in accessories. A double-digit gain in video game software sales is impressive enough on its own when compared to 2020’s surge in spending amid COVID-19 lockdowns.
October’s gains are mostly due to some popular new game releases, as well as robust consumer demand for the latest gaming consoles including the PlayStation 5, Xbox Series X and Nintendo Switch.
On a year-to-date basis, consumer spending on video games reached $46.7 billion, 12% greater than the same period in 2020.
Roblox, one of the world’s most popular online gaming platforms for children, recently announced its number of daily active users grew 31% to 47.3 million in the third quarter, per Reuters. Quarterly bookings jumped 28% to $637.8 million, exceeding market expectations.
Similarly, Microsoft reported another quarterly rise in gaming revenue, driven by ongoing demand for its Xbox Series X console. Total gaming revenue was up 16% compared to the same quarter a year prior, which the company partly attributes to record setting monetization and engagement on its platforms, according to Video Games Chronicle.
Reuters notes that even though the gaming boom began during last year’s months-long isolation, the sector’s breakout has yet to slow even as COVID-19 restrictions ease and schools reopen.
Video game industry advisor Mat Piscatella believes there is increased purchasing momentum for video games heading into the holiday season compared to pre-pandemic levels. With demand set to remain strong through the end of the year, the holiday season could certainly give the video game industry another leg up heading into 2022.
Gaming Boom Set to Persist Despite Shortages this Holiday Season
MRP has previously highlighted soaring demand for consoles amid the lagging supply of hardware, noting that the deficit is unlikely to be resolved anytime soon. Over the last few months, it appears production woes have worsened.
While the ongoing semiconductor shortage has begun to subside for some industries, video game manufacturers have yet to receive any relief. According to Forbes, the PlayStation 5 and Xbox Series X and S consoles sell out almost instantly after being stocked. Even a full year after the consoles’ original release dates, the semiconductor shortage is keeping inventory too tight to meet demand.
With strong consumer demand sending supplies off the shelves almost immediately, its likely both Sony and Microsoft could have shattered every old record they had if not for supply constraints. And while those constraints have hindered production over the last year and a half, strong video game demand will likely persist longer than the chip shortage.
The Wall Street Journal writes that Sony is on pace to sell roughly as many PS5 consoles as it did when the PS4 first came out. PS5 sales led to a 27% year-over-year revenue increase in the last quarter for Sony’s game division, a figure that could have surged higher if not for a shortage of components.
Meanwhile the Nintendo Switch, which led all major consoles in sales in October, has seen its supply forecasts fall further as well. BBC reports that it reduced its full-year hardware sales forecast has been reduced to 24 million units , down from 25.5 million, a direct impact of the global chip shortage.
Fortunately, Nintendo also announced it revised its Nintendo Switch software forecast up, projecting 10 million more games sold than previously anticipated.
Major video game manufacturers are likely to sell out through the end of the year, as consumer surveys show Americans are ready to splurge this holiday season and retail sales bounce back.
The gaming boom has already defied expectations of a post-pandemic slowdown. With the holiday season in full swing, video game manufacturers appear primed to break monthly records through the end of the year as they eagerly await an easing of the chip shortage.