Home Blog 2018 NPD 2017 U.S. video game market prediction results
Jan 23, 2018

Mat’s 2017 US Video Game Market Prediction Results

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Now that 2017 full year data for the video game category from The NPD Group is in the books (check out our video for all the detail), it’s time to take a look at the report card.

I made two sets of predictions last year: one in mid-January; and a pre-E3 read from early June.  And now, without further ado …

From my blog post of January 16th, 2017:

  • Early Year Prediction 1: Over 5k games will release on STEAM in 2017.  For every title released on consoles or portable at retail, at least 25 titles will release on STEAM.
    • So, what happened? Over 7,600 games released on STEAM in 2017, while 314 new release titles made it to retail for consoles and portables.  This equates to a ratio of 24.4 STEAM games for every console or portable game released.
    •  Result: The ratio was right, but I underestimated just how many games would come to STEAM.
  • Early Year Prediction 2: Users, not Units, will be firmly embedded as the planning currency for console game publishers, so expect more incentives to stick with one console game longer.
    • So, what happened? Games being sold as a service took firm hold of the top sellers list in the 2017 market, with each of the titles in the top 10 offering some form of ongoing service-based support.
    •  Result: Correct. 
  • Early Year Prediction 3: Virtual currencies and consumables will be baked into more (most?) console games.
    • So, what happened? One of the things 2017 will be remembered most for in the industry is the rise to prominence of the “loot box”.  While virtual currencies and consumables go well beyond loot boxes, the impact of these mechanics in some of the biggest games of the year cannot be denied.
    •  Result: Correct. 
  • Early Year Prediction 4: Gold editions will become more prevalent, lifting average selling prices at launch well above $60.
    • So, what happened? Bundling additional content with the base game became a more widespread practice in 2017, with many games holding average prices at higher levels for longer periods of time than has been seen in past years.  Of the games in the top 10 for all of 2017, more than half offered these types of editions, a ratio I expect may rise higher in the future.
    •  Result: Correct.
  • Early Year Prediction 5: The Nintendo Switch will experience hardware shortages, alter the console landscape.
    • So, what happened? Hardware shortages were a challenge for Nintendo Switch for a majority of the year as it continued its record setting sales pace.  And in terms of altering the console landscape, well, I think we’ve yet to realize the full impact Nintendo Switch will eventually have on gaming.  Prior to launch, I was one of the more bullish analysts out there on Switch, and it blew away even my lofty sales expectations.
    •  Result: Correct.

But these weren’t my only predictions from 2017. 

I made a more specific set of Holiday predictions just prior to E3, in a blog post from June 1st, 2017:

  • Holiday Quarter Prediction 1: Call of Duty: World War II will be the quarter’s best-selling game, with sales growing more than 25 percent versus last year’s Call of Duty: Infinite Warfare.
    •  Result: Correct.
  • Holiday Quarter Prediction 2: At least 4 titles will achieve $100 million or more in Q4 packaged consumer sales.
    •  Result: Correct.
  • Holiday Quarter Prediction 3: The top 5 selling games this Q4 will combine to generate at least 20 percent more packaged consumer revenues than the top 5 one year ago.
    •  Result: Incorrect, but I was close.
  • Holiday Quarter Prediction 4: This year’s top 5 selling games of Q4 will be Call of Duty: WWII, Star Wars Battlefront II, NBA 2K18, Super Mario Odyssey and Destiny 2.
    •  Result: Incorrect, but close again.  The top 5 selling games of Q4 were Call of Duty: WWII, Star Wars: Battlefront II, Super Mario Odyssey, NBA 2K18 and Assassin’s Creed: Origins.
  • Holiday Quarter Prediction 5: By the end of Q4, approximately 320 packaged titles will reach retail shelves, up from 271 a year ago, and up from the 21st century low of 230 games in 2015.
    •  Result: Correct.  At least close enough.  314 packaged titles released in 2017.  I was off by 2 percent.
  • Holiday Quarter Prediction 6: At year’s end, the time-aligned installed base of the PlayStation 4 and Xbox One will exceed that of the PlayStation 2 and Xbox by 5 percent, and will be ahead of the PlayStation 3 and Xbox 360 by at least 25 percent.
    •  Result: Once more, very close but just off.  The time aligned (over the first 50 months in market for each console) installed base of PS4 and Xbox One exceeds that of the PlayStation 2 and Xbox by 4 percent, and is 18 percent ahead of the PlayStation 3 and Xbox 360.
  • Holiday Quarter Prediction 7: Sales of portable hardware and software will be down by at least 40 percent versus Q4 2016.
    •  Result: Incorrect, the decline in portable hardware and software sales was less than predicted, thanks mainly to strong performance from Pokémon Ultra Sun, Pokémon Ultra Moon, and the new Nintendo 2DS hardware releases.
  • Holiday Quarter Prediction 8: At least 90 percent of Q4 packaged software sales will come from the PlayStation 4, Xbox One and Switch.
    •  Result: Off by 1 percent at 89 percent, so I’ll call this close enough to be correct.

The holiday quarter performed much as I expected.  The exception being Portable, which performed better than I had expected due to the launch of Pokémon Ultra Sun and Pokémon Ultra Moon and the performance of the $79.99 Nintendo 2DS hardware.

Overall, it was a fantastic holiday quarter, and quite a remarkable year, for the video game industry.

And hey, as far as report cards go, I’ve certainly had worse.

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