The Saga Continues

Grand Theft Auto V accounted for 50% of all games software sold last month—and that’s bad news

October 18, 2013
October 18, 2013

This item has been corrected.

Two sets of numbers out this week show just how quickly the ground is shifting in the videogame industry. Figures from the NPD Group, released monthly and watched closely, show a bumper September for videogame retail sales. Total US sales came in at $1.08 billion across hardware (such as consoles) and software (such as games). That’s up 27% from September last year. Yet there is reason to be cautious: more than a third of that amount comes from sales of one single game, Grand Theft Auto V (GTA). It accounted for more than 50% of the $754 million in software sales. (GTA’s worldwide sales including the US exceeded $1 billion.)

Looked at another way, without GTA V total industry sales would have been down roughly a fifth from $848 million last year and physical software sales would have declined a staggering 40%.

The shift to free

Where is that money going? Are gamers bored of gaming? The numbers makes sense when you look at another set of figures, which come from SuperData, a research firm that looks only at digital sales. It found that digital sales of videogames stood at $970 million, up 6% from last year. Big-publisher games for PCs and consoles managed to make less than $200 million of that, a 23% decline from last year. Paid-for online multiplayer games were also down a fifth.

Fastest growing were free games on social networks, mobile phones and online, which made $691 million in September, up a quarter from last year. Mobile alone is up 52% year on year, with King.com’s Candy Crush Saga and Pet Rescue Saga the two most profitable games and Clash of Clans from Supercell at number 3. King last month filed for an IPO thought to be valued at $5 billion. Japan’s SoftBank Corp this week paid 150 billion yen ($1.53 billion) for a 51% stake in Supercell.

It is important not to overstate the decline of physical distribution: gamers are spending less because they know that both the major consoles—Xbox and Playstation—will be out with new generation machines in November. Expect to see numbers rise once that happens.

Yet it is clear that the money in videogames is moving from big, expensive console games to free apps and social games that make their sales from in-game micro-payments, such as $1 here to gain an extra life or a $0.69 there for a booster of some sort. All those cents add up to a lot of millions.

Correction (Oct. 19, 2013): An earlier version of this article overstated the hypothetical decline of physical software sales without GTA V at 75% from Sept. 2012. The fall is a less precipitous but still worrying 40%. This has been corrected.

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