Does NPD Group Know What It’s Doing?

Does NPD Group Know What It’s Doing?

Whenever the NPD Group reads off video game sales numbers, the gaming community makes sport of the event by declaring victory for favored systems and defeat for retail’s stragglers. But even the most hardcore fan has to admit that reading NPD’s numbers is like reading a report about modern technology that was written by a dinosaur. NPD’s game-related sales data feels less and less relevant as the group continues to report exclusively on game sales that happen within the walls of brick and mortar stores. Digital game sales are currently not tallied or disclosed, and neither are sales of mobile games. Is the NPD going to “get with it,” or will the group’s numbers for game sales fade into insignificance?

Earlier this month, IndustryGamers met with David Riley, a spokesperson for NPD, and its President of Games, David McQuillan. They revealed that NPD has every intention of tallying digital game sales, but the company is taking the time to make sure it does things right.

“We’re ahead of the eight ball on this; it tends to get reported that we’re behind it. And that’s a complete misrepresentation of what we’re doing,” Riley told IndustryGamers.

“We are onboarding digital retailers with the goal of having a tracking service that’s going to incorporate both the physical format and the digital format to present a holistic picture of the market,” added McQuillan. “For various reasons, that’s been a slow, gradual process. So what we’ve done in parallel is we’ve made significant investments in our tracking of the games market through consumer surveys that go to our online consumer panel.”

McQuillan explained that those “investments” have since allowed the NPD to “capture [sales] information at a title level” for different branches of digital transactions, including those that occur on consoles, PC, portable game systems, mobile phones, and even subscriptions.

“We do have digital retailers as well as publishers who are providing us with information to help us calibrate the consumer information,” McQuillan said. “The feedback we’ve gotten in the industry is extremely positive.”

The NPD is apparently also talking to game companies in order to garner input on what defines the game market. As IndustryGamers puts it, “The games industry needs to have a standard for what types of data fall in what category.”

“The danger is that I would be talking about digital and you might think that [mobile or social] is rolled in there,” said McQuillan. “The risk is that a publisher starts talking about their growth and they compare it against what we have, and it’s an apples to oranges comparison. That’s just a bad thing for both of us. We want to make sure we get the definitions right.”

All these plans and precautions by the NPD add up to good news for anyone who’s enthusiastic about tracking video game sales numbers. The group indeed has plans to register sales for digital downloads, but has decided avoid a half-hearted effort that would have to be disassembled and re-constructed within a year.

Reading through the NPD’s breakdown of how it intends to tally digital sales is also a bit overwhelming. It’s a good reminder of how thoroughly games retail has changed over the past five years. Indeed, there’s no point in breaking up the market into the black and white categories of “retail sales” and “digital sales:” “Retail Sales” alone can account for new game sales, used game sales, and titles like World of Warcraft which can sell installation CDs out of stores, but require players to pay a subscription to access the content online. The digital market is composed of downloadable content (say, a new level or a new song on Rock Band) full digital games, mobile games, microtransactions, and more.

(On a side note, it’ll be interesting to see if and how the NPD includes monthly totals for microtransactions in games like FarmVille; social game companies like Zynga aren’t forthcoming with their numbers.)

The NPD has been quiet about its plans for reporting digital sales because, frankly, getting into position to report those numbers is a pretty big job. We might have to wait a little longer before we see NPD charts that truly provide a thorough look at game sales, but it’ll benefit the group (and us) to do things right the first time.

About Nadia Oxford
Nadia is a freelance writer living in Toronto. She played her first game at four, decided games were awesome, and has maintained her position since. She writes for 1UP.com, Slide to Play, GamePro and other publications, and is About.com’s Guide to the Nintendo DS.

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