Mixed results for software, games sales

Revenue from retail software sales grew slightly in 2002, but unit sales fell, according to a new study. Video game makers also saw ups and downs.

David Becker Staff Writer, CNET News.com
David Becker
covers games and gadgets.
David Becker
2 min read
Retail software sales were a mixed bag in 2002, with revenue up slightly but unit sales down, according to a new study released Monday.

U.S retail sales of software totaled $5.7 billion for the year, up 3.1 percent from 2001, said research firm The NPD Group. Unit sales were down 4.2 percent, however, to 132 million units.

The industry was on track for a record year until the fourth quarter, said NPD analyst Steve Koenig, when an overall weak environment for consumer spending trimmed the usual holiday boost.

"The third quarter was very strong for software...and I was pretty optimistic when those numbers came in," Koenig said. "But the overall retail environment was a little too cold for the holidays. Software wasn't the only retail line of business that had a poor showing."

Tax software dominated the sales charts, with three versions of Intuit's TurboTax products in the top 10, along with one edition of H&R Block's TaxCut.

Games were also big, with two versions of the hit "The Sims" in the top 10, along with the strategy game "Warcraft III."

Koenig said PC games fared better than many in the industry had expected, given the fierce promotion behind console gaming.

"PC games were really shoveling against the tide this year," he said. "With the tremendous competitive threat and momentum--both in retail and on the development side--towards console games, I think the results could have been a lot worse. I think this shows there's still a loyal and dedicated base for PC games."

The top 10 list was rounded out by security software specialist Symantec, with two versions of Norton Antivirus, and Microsoft, which charted with the upgrade version of its Windows XP Home Edition operating system.

Koenig said he expects retail software sales to remain flat this year, with steady revenue from games, tax software and security products.

In a separate report, NPD charted 10 percent annual growth last year for the U.S. video game industry. Revenue from video game hardware and software totaled $10.3 billion for the year, up from $9.3 billion in 2001.

Software sales accounted for the bulk of the growth, with a rise of 21 percent in revenue and of 15 percent in units sold. On the hardware side, sales of games consoles rose 10 percent in units sold, but declined slightly in revenue--from $3.7 billion to $3.5 billion--thanks to across-the-board price cuts last year.

Take-Two Interactive Software was the most successful software publisher, with the company's controversial "Grand Theft Auto: Vice City" and "Grand Theft Auto 3" shooting-and-looting games ranking No. 1 and 2, respectively. Seven of the top 10 games were for Sony's PlayStation 2 console, with Microsoft's Xbox and Nintendo's GameCube and Game Boy Advance each accounting for one title.