New PlayStation, Xbox games breathing life into video game industry

After months of slumping software and less-than-stellar launches, video games for the current generation of console hardware are finding their stride.

Nick Statt Former Staff Reporter / News
Nick Statt was a staff reporter for CNET News covering Microsoft, gaming, and technology you sometimes wear. He previously wrote for ReadWrite, was a news associate at the social-news app Flipboard, and his work has appeared in Popular Science and Newsweek. When not complaining about Bay Area bagel quality, he can be found spending a questionable amount of time contemplating his relationship with video games.
Nick Statt
3 min read

The latest installment in the seminal fighting game series, Mortal Kombat X, took the top software spot in April. PlayStation

April proved to be a shot in the arm for the retail video game industry.

Sales of game hardware, software and accessories in the US bucked a persistent downward trend last month with 3 percent overall growth, to $595.7 million, from this time a year ago, according to industry researcher the NPD Group.

Nearly every month since the introduction of new gaming hardware from Microsoft and Sony in November 2013, customers haven't been buying newer games at a fast enough clip. At least, not through traditional retail outlets like GameStop and Best Buy and online at websites like Amazon, which is what NPD tracks.

Instead, the retail market has been kept afloat by the number of customers willing to buy Microsoft's Xbox One and Sony's PlayStation 4 consoles. Still, those hardware sales haven't been quite strong enough to keep the industry from slumping negative for the better part of the last 18 months. Compounding the issue for the industry, sales of software for older hardware has faced a steeper than expected drop-off, game executives have said.

The picture was different in April. Hardware fell 4 percent to $184 million, while software jumped 10 percent to $264.4 million in April, NPD reports. (Hardware sales are still cumulatively 50 percent higher than the previous generation of game consoles.)

"Part of the reason for the software growth was due to April 2015 launches having 50 percent higher sales than launches in April 2014," said NPD analyst Liam Callahan. April saw the release of fighting game Mortal Kombat X, which took the No. 1 software spot followed up by open-world crime title Grand Theft Auto V and the cops vs. robbers shooter, Battlefield Hardline.

Though retail is rebounding from a consistent string of interchanging slips in hardware and software sales, the inevitable shift to sales over the Internet still looms large -- making NPD reports much like tracking how many CDs are sold at Best Buy in the earlier days of Apple's iTunes.

The video game industry, like music and television before it, is moving away from selling a physical disc, placed in a box and wrapped in plastic. Instead, game makers are seeing sales shift to the Internet, where players connect their credit cards to online marketplaces like Sony's PlayStation Store, Apple's App Store and Valve's Steam marketplace. There, you can buy full games outright or spend money incrementally on titles that are increasingly being designed to last months to years thanks to supplemental add-ons.

Sales of full games downloaded over the Internet and game adds-on like additional storylines -- or in-app purchases in mobile market -- hit $1.1 billion in April, up more than 15 percent from this time a year ago, according to SuperData Research.

In their respective quarterly earnings reports earlier this month, big-name game makers Electronic Arts and Activision Blizzard yet again reiterated the industry's commitment to move their priorities toward sales over the Internet.

Of EA's $4.3 billion in sales last year, after some accounting adjustments, a record $2.2 billion came from Internet sales of both full games and add-ons. Sales from EA's growing library of titles for smartphones and tablets also hit a new record, ringing up $524 million for the year. Activision said a record 76 percent, or $538 million, of its total revenue came from sales over the Internet of full-game downloads and in-game adds-ons.

Before long, the sight of an eager game player heading to the local GameStop to purchase the newest title may be a relic of the past.