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I don’t care about NPD sales figures and neither should you

Sections: Consoles, PS3, Wii U, Xbox-360

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Every month, the NPD Group releases sales figures for games and consoles. The usual headlines for NPD’s reports tend to state what the top selling game/console is, and a brief statement that suggests the state of the gaming industry. Sometimes, NPD notes declining sales which leads some to wonder if consumers are starting to look to other entertainment mediums to spend their hard-earned money. The fact is that NPD’s numbers are very skewed and should never be used to make even the tiniest assumption regarding the overall financial state of the video game industry.

NPD Group gets all its software and hardware data based on retail sales. In this day and age, basing video game sales solely on retail is unrealistic. NPD doesn’t count digital sales from services such as Steam, Origin, Xbox Live, PSN or the eShop. Steam sales alone are enough to greatly change how much money NPD says the gaming industry takes in every month. However, no one knows how much money Steam makes because Valve is not a public company. Microsoft, Nintendo, EA may not be private, but their digital sales numbers aren’t reflected in NPD Group’s reports either.

Keep in mind these phantom numbers are just for digital sales on consoles and PC. We haven’t even counted mobile games from Google Play, the Apple App Store, the Amazon Appstore and others. Do they not sell games? What about Angry Birds and other money makers such as Where’s My Water and Minecraft: Pocket Edition? Surely these games add at least $1 million to the overall total.

NPD numbers may be fine for analysts that are trying to direct investors on what to sink their money into, but it’s practically useless to everyone else. The only thing I’ll somewhat take NPD’s word for are hardware numbers since retail channels are still a decent way to measure hardware penetration. Other than that, it would be wise to not even bother with NPD’s video game software sales figures. They’re just too off the mark.

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