Gamers are faced with a proliferation of options both in content acquisition and gaming platforms. The options continue to expand, fueled not only by the increasing number of devices on which video games can be played, but also by the many devices that allow consumers to acquire digital video game content.
In this increasingly complex market, companies require a variety of research options. Our combination of point-of-sale (POS) information, consumer insights, industry expertise, and market experience delivers the video game market research options necessary to help you make better business decisions.
Monitor retail sales of PC games and video games hardware, software, and accessories in the US and Canada. The service covers all distribution channels, including online sales. No other market research company offers this level of detail in point-of-sale market information.
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U.S. Games Market Dynamics
For an eagle-eye view of the market, this service covers the entire U.S. games industry at the category level. Our new core product for all U.S. games clients, it encompasses market size by segment, key market insights, and analysis of emerging trends. By integrating POS and consumer information, the service provides analysis of delivery method (physical, digital), hardware sales, accessories by type and platform, and gaming content. Its information on content includes new and used physical sales, digital downloads and add-on content, rentals, social network gaming, subscriptions, and mobile games.
Games Consumer Insights Reports
Track awareness, usage, and experiences with established and emerging gaming trends. This is the industry’s first service that measures consumers’ video game acquisition habits in all forms, across all platforms. This ongoing study is the only source for a complete view of how retail, digital, free gaming, and piracy factor into games acquisition.
Video Game and PC Game Subscriptions Reports
Look to these quarterly reports for indispensable information about the market for paid online subscriptions to MMO/PC games, casual gaming websites, and video game console services (Xbox Live Gold). Get the best view of this burgeoning market, with reliable consumer insight from thousands of US gamers age 13 and older who are members of our online consumer panel.
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49 Million U.S. Internet Homes Now Own a Connected TV or Attached Content Device, According to The NPD GroupAs Streaming Video Content Surges, U.S. Connected TV Household Penetration Increases 14% Year-Over-Year Port Washington, NY, March 7, 2016 – More than half (52%) of all U.S. Internet homes have at least one TV connected to the Internet, representing an increase of six million homes over the past ye More than half (52%) of all U.S. Internet homes have at least one TV connected to the Internet, representing an increase of six million homes over the past year, according to The NPD Group Connected Intelligence Connected Home Entertainment Report.
If you spend enough time looking at enough data, you’ll realize that correlations tend to fall into three categories:
- 1. The obviously useful, i.e., you’re a pizza maker who has seen your share of the market fall as a new competitor’s share has risen.
- 2. The dubious, i.e, when trying to find a way to overcome that share decline, you discover a near perfect correlation between increases in mozzarella consumption and increases in the number of civil engineering doctorates.
- 3. The seemingly dubious but actually quite useful, i.e, you’re a pizza maker who finds that your customers prefer Android phones to iPhones.
Finding the business value in that last category is not an easy proposition, however. It requires a bit of imagination and a bit of commitment. You have to look beyond the immediate -- wow, that’s kind of cool! -- to see what it might mean for your business -- wait, I can use that!
So let’s look at the business cases for unusual correlations.
CNBC published an article recently that used data from The NPD Group to look at what consumers’ phone operating systems said about their food choices. That article generated a fair amount of attention across social media. You may have come across it yourself on Twitter, LinkedIn or elsewhere. If not, take a moment to read “What your smartphone says about your waistline” now.
As the article says, new Checkout Tracking℠ data from The NPD Group shows a slew of surprising links between food preferences and cellphones. Folks who carry iPhones are more likely to eat soup and drink smoothies. Android users over-index for roast beef sandwiches and pizza (which is not to say that those over-indexers overeat. Who are we to judge?)
The correlations also extend to restaurant preferences. IPhone users can be found at Panera; Android users are over at Hardee’s.
So if you work in the IT department at one of the restaurant chains mentioned in the CNBC article, you now know exactly which phone system to prioritize in your app development.
But if you work anywhere else, it may not be immediately apparent what the business uses of such cool correlations may be….until you look deeper.
Hidden in plain sight
Checkout Tracking data is based on the millions of receipts sent to us and our technology partner, Slice Intelligence, by consumers. Those receipts yield detailed, item-level data about individual consumers across stores, across all retail segments, covering both online and brick and mortar, and over time.
Just think about that for a second: transaction-level detail across all retailers, across all channels and all time, at the individual buyer level.
Checkout Tracking can tell retailers what their most loyal customers do after they left their store. It can tell manufacturers what else customers bought when they picked up their product at a retailer. So let’s look at just a few of the less-than-obvious applications.
- If you know what products customers bundle together at checkout, you can maximize the value of each customer visit
- If you can see what percentage of your customers’ wallets are captured by others, you can determine your true competitive set and develop plans to boost your share of wallet
- If you can learn what’s really lifting sales (penetration? frequency? purchase size?) you can spend your marketing dollars where they’ll count
Checkout Tracking yields loads of such fascinating correlations and less-than-obvious business applications. In addition to food, NPD tracks 20 other industries, including games. Here are a few correlations from the uber-hot category of Millennial gamers:
- Male Millennial mobile games buyers spend more of their dollars on Uber and Apple.com. They also spend more online dollars on Travel and Movies and TV.
- Female Millennial mobile games buyers spend more of their dollars on Groupon. And they spend more online dollars on pet supplies and online deals.
Data like that suggests, for example, that the best way to reach female gamers may be through online deal sites. Or if you own a pet store, you may want to consider in-game advertising.
If you’d like to know more about how Checkout Tracking would work for your business, fill out the form to the right.
Insights and Opinions from our Analysts and Experts
eSports is one of the newest and largest trends in gaming, with our recent findings showing a substantial number of U.S. gamers (33 percent) have watched a formal eSport competition, and 42 percent have watched an informal video stream of gameplay. What does this trend mean for the future of marketing video games?
To take a step back, just what the heck is eSports? eSports is defined as organized, multi-player gaming competitions, such as the recent Heroes of the Dorm competition or Halo World Championship. When we say informal video streams of gameplay, we mean watching amateurs play games live through services like Twitch, or watching You Tube videos. For some context, You Tube video game blogger, PewDiePie, has the highest number of YouTube subscribers in the world at 43 million.
Now that we have those defined, why do we care about eSports and streaming gameplay? Besides its size in viewership, eSports and streaming viewers are highly engaged, akin to those watching a traditional sporting event. Sixty-four percent of those watching are doing so at least once per week, and these sessions are not short, as the majority of viewers (58 percent) are watching for 1-2 hours per session.
Another thing I am often asked: Why would you watch an eSports event? Most viewers’ rationale was the social aspect of ‘a friend inviting me to join.’ Some consumers are also using eSports to learn tips for the game or to ‘learn about a game they are not familiar with.’ I believe this is where eSports is inherently different from traditional sports in that observing these transferable gaming skills are not only appealing, they can also be put into practice by the viewer in actual gameplay. For example, if you see Matt Harvey pitch an amazing game for the Mets, you probably don’t have the opportunity to apply that learning to your own life; with eSports you can immediately play that video game and improve your gaming skills.
One of the reasons why there has been so much investment in eSports is because it is a great way to promote games. We found that 69 percent of viewers have gone on to buy a full game or DLC for an existing game because they saw someone play it online.
This is critical: consumers are using eSports to engage with games, making eSports a catalyst for change in the way games are marketed. eSports bring positive attention to the industry, but is also important in the way consumers learn and can then potentially spend on games featured at eSports events. Therefore, it is a trend everyone in the business of creating, or marketing a game can’t afford to ignore.
We are now halfway through October and in the beginnings of the gaming holiday season.
Typically, the fourth quarter (Q4) of the calendar year represents just over 40% of the year’s sales, due to a combination of gifting and great software releases. My expectations are positive for the holiday; here are my thoughts by category:
To set the stage, Hardware sales are down 6% year-to-date through August data. This is mainly due to the decline of 7th generation consoles and portables, which are not being offset by 8th generation consoles despite a 66% increase in sales.
-For Xbox One, this holiday will have hard comps to last year as we saw strong sales based on the attractive Assassin’s Creed Unity bundle and the lower $350 promotional price. However, with the launch of Halo 5, Xbox One has a ‘system seller,’ and ‘killer app’ that could see many 360 holdouts upgrading to the Xbox One.
-PS4 comps would also have been tough due to their success last holiday, but the recently announced $50 price drop is certain to help sales. PS4 does not have as compelling a story with their first-party lineup, but one could argue that they have two of the best third-party bundles including the presumed software hits of Call of Duty: Black Ops III and Star Wars: Battlefront.
-Wii U was helped last holiday due to the success of Super Smash Bros, but the case will be tough for software pushing hardware this holiday. While Mario Maker has the potential to create a fan base over time, and Yoshi’s Wooly World’s has a unique art style, they will likely not generate the excitement we saw for Super Smash.
Accessories have so far had a stellar year through August data, currently up 13%, and I expect the trends that drove this growth will continue through the fourth quarter:
-Point cards are having their best year ever so far, a trend that I expect to continue and help holiday sales. Game Pad sales will be helped by 8th generation hardware sales, along with new items driving headsets/headphone purchases.
-Interactive Gaming Toys are also poised for increased sales as we’ll have a new player in LEGO Dimensions, and Disney Infinity with Star Wars is sure to ride the wave of excitement driven by the release of Force Awakens.
Through August, New Physical Software is up a modest 1%, but there is potential for success this holiday due to the following:
-Non-annualized franchises are the key story for software this year. Star Wars: Battlefront, Halo 5, and Fallout 4 all launching this holiday, plus the franchises that typically sell well like Call of Duty, NBA 2K, Madden, and Assassin’s Creed.
-The story here, much like for hardware will be about strong 8th generation sales needing to overcome the expected 7th gen & portable software declines.
With that, here is my prediction for the top 10 games in Q4’15:
1. Call of Duty: Black Ops III
2. Star Wars: Battlefront
3. Halo 5: Guardians
4. Fallout 4
5. NBA 2K16
6. Assassin’s Creed: Syndicate
7. Madden NFL 16
8. FIFA 16
9. Disney Infinity 3.0
10. Lego Dimensions
The last few rankings are going to be tough, so there are some ‘wildcards’ that may edge out what I have here, including: Skylanders: Superchargers, Metal Gear Solid V, Just Cause 3, Just Dance 2016, and Rainbow 6: Siege.
In summary, I am expecting Q4’15 to be a “gift” for the video game industry with the factors above driving growth across hardware, accessories, and software.
Though Pete Townshend of The Who was referring to the joy of traveling the open road in a mobile home, and not the use of mobile phones, I keep hearing that song in my head when thinking of the key finding from our Kids and Gaming 2015 report: kids ages 2-17 have “gone mobile” as mobile devices – specifically, smartphones, tablets and iPod Touch – now represent the most widely used gaming device among this age group (at 63%).
The largest and most surprising change in usage dynamics was the drop in gaming on computers, which decreased by 22 percentage points from 2013 to total 45% of kids playing on PCs and Macs. This may be due to a shift in parents favoring smartphones and tablets for everyday internet tasks like email and checking the internet. There appears to be a ripple effect as parents change their technology habits, minimizing their use of computers in favor of smartphones. Perhaps this usage pattern is having an indirect impact on kids.
One of the reasons that mobile has emerged as the top gaming device is the shift in time, with 41% of kids stating they spent more time on mobile devices than last year. Time is an even more important metric than overall incidence as it speaks to engagement. With more frequency of play and more time being spent, clearly kids are focused on mobile.
While mobile is definitely important, let’s not forget the new generation of consoles. In 2013, when we last fielded this report, the PS4 and Xbox One (XBO) were not yet released. We know from our Retail Tracking Service that the install base for these devices has grown tremendously compared to the prior generation, and adoption from kids has been consistent with this as PS4 and XBO gaming incidence land at 11% and 8%, respectively. In terms of time, we are seeing the transition take place from one generation to another with 7th generation consoles being used less often.
This speaks to another trend: kids, much like adults, are playing in multiple ways. Despite the emergence of mobile as the top platform for gaming, fueled by the adoption of 8th generation consoles, console play for kids is healthy as well. While overall incidence of gaming remains at over 90%, it is the dynamic changes to kids behavior in how they game that is most compelling.
As I head to E3 2015 (I am literally in the air right now as I am writing this), I am excited at the prospect of how this year’s show will compare to previous ones … the industry is evolving at breakneck speed, so I expect plenty of excitement at this year’s E3.
What am I excited about?
- I expect to see further hype and details about top-selling franchises like Call of Duty, Madden, Assassin’s Creed, NBA 2K, FIFA as well as Skylanders, Disney Infinity, and amiibo. What are the new features of these games that will drive sales and get fans amped?
- I am also intrigued to learn about games that will fill in the top sellers outside of the annual franchises (for reference, see below for the top 10 new physical games from 2014). Who will fill in the slots for games like Destiny and Watch Dogs? Could games like Star Wars: Battlefront, Halo 5, Battleborn, Lego Dimensions, Star Fox, Metal Gear Solid V, Final Fantasy XV, and Fallout 4 make the top 10 in 2015?
- I am also excited about Virtual Reality and Augmented Reality at E3. Oculus Rift already announced some details of partnering with Xbox One at a Pre-E3 show conference last week. I expect to see more details on Sony’s Project Morpheus, Microsoft’s HoloLens, and perhaps Valve and HTC’s Vive at the show. As with many hardware launches, price and content will be key for consumer adoption of VR/AR. While pricing may be premature for these products, gamers need to see more content, and not just concept games, but fully-realized games – they need to see the so-called “killer app” for VR/AR. Hopefully, it will be at E3 this year.
One major difference from E3’s of the past that I expect is a greater focus on mobile gaming. There has been steady growth in mobile spending and usage over the past few years, which is something that is reflected in the greater number of mobile companies attending E3 this year.
From NPD’s Checkout TrackingSM service, we know the mobile space is highly competitive. In Q1 2015, six out of 10 mobile payers were only spending money in one game. With this kind of dedication to a single game, an event like E3 seems like a great place to raise awareness of a new mobile game. We also know from Checkout Tracking that in Q1 2015, the average dollar amount mobile game payers spent on mobile games was $56, close to that typical AAA game price point – so this is not a small market to ignore.
As I head into the heart of E3, I am truly looking forward to seeing new details on returning franchises as well as new games, more robust content for VR and AR, and how the rise in mobile gaming will be reflected at the show.
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