Eighth-Gen Console Sales Increase But See Profits Fall

With the eighth generation in full swing, and both Xbox One and PlayStation 4 crossing the one-year mark, CNET reports that the financials may be making the video game industry search for some extra lives, as the NPD Group, a market research group, finds an 11% decline in the industry across all retail purchases between November 2013 and now.

Of particular noteworthiness is the relationship between video game hardware and software; while hardware, such as consoles, had been floating profits along to make up for weaker software sales during 2014, the month of November marked a 23% decrease in console sales compared to November 2013, whereas game software broke relatively even. While some of that decrease can be attributed to the “newness factor” in 2013 versus now, analysts point to some defensive maneuvers that may have hurt game makers, especially Microsoft, more than it helped.

NPD Group analyst Liam Callahan said in a statement that “Despite a decline in dollar sales, hardware unit sales for eighth generation consoles increased by 3 percent over November 2013.” That is to say, all the price-slashing and bundling the Big Three are pushing this holiday season may be working, but at a cost of profits.

Not all news speaks doom and gloom of the gaming industry, however. Thanks in part to the aforementioned aggressive console marketing, along with Black Friday and Cyber Monday deals, digital downloads of disc-less games, coupled with DLC, broke the $1 billion mark last month. This marks a 23% increase over November 2013, according to industry analyst SuperData Research.

According to sales numbers, the top three games for November 2014 sales included Activision's Call of Duty: Advanced Warfare, Rockstar's eighth-gen port of Grand Theft Auto V, and Nintendo's Super Smash Bros. for Wii U.