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Game Sales Hit Record $10.5 Billion in 2005: Many Market Experts Had Predicted Lackluster Sales

Posted on: Saturday, 14 January 2006, 15:00 CST

By Victor Godinez, The Dallas Morning News

Jan. 14--Maybe 2005 wasn't such a washout for video game companies after all.

The market research firm NPD Group said Friday that total U.S. retail video game sales -- including hardware and software -- hit a record $10.5 billion in 2005.

That surpassed the $9.9 billion generated in 2004 and beat the record of $10.3 billion set in 2002, even though many experts had predicted lackluster year-end results.

The research firm said sterling sales of portable systems and games compensated for the well-publicized shortage of Xbox 360 consoles and a lack of hit home console games.

Portable game software sales hit $1.4 billion, up 42 percent from 2004, while portable hardware sales rose 96 percent to $1.6 billion and portable accessory sales increased 88 percent to $230 million.

The portable market was driven by Nintendo's older Game Boy Advance system, which accounted for 64 percent of portable games sold. Consoles like Sony's PlayStation 2 and Microsoft Corp.'s much-anticipated Xbox 360 may have garnered most of the hype last year, but that didn't translate into a boost in sales.

Anita Frazier, an analyst with NPD, said that Microsoft sold about 600,000 Xbox 360 consoles in 2005 after its launch in late November, a relative drop in the bucket compared with the estimated 89 million portable and home console installed base in the U.S.

According to NPD, dollar sales of console hardware, software and accessories last year declined 3 percent, 12 percent and 8 percent, respectively.

"The introduction of the Xbox 360 was a defining moment for the industry in 2005," Ms. Frazier said in a statement. "However, it goes without saying that the full impact of next-generation consoles on the consumer market won't unfold until later this year when Sony and Nintendo's video game consoles hit U.S. retail shelves."

E-mail vgodinez@dallasnews.com

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Source: The Dallas Morning News

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