The amount of M-rated games has seen a double-digit decline, but revenues from such titles were way up from 2006 to 2007. But there's more to that story. Matt Matthews examines revenues from specific ESRB rating categories.

A couple weeks ago, we found that there recently has been a significant decline in the number of M-rated games. But what about the other half of the story--the money half? How are revenues for M-rated games compared to titles with less restrictive ESRB ratings?

Thanks to some generously offered data from the NPD Group, we can now attempt to answer these questions. By my count, there were 14% fewer M-rated games in 2007 than in 2006 – yet revenue for M-rated games was up – way up – in 2007.

Average Revenues

The figures NPD sent me are very specialized: they are revenue per game in each ESRB rating category. The graph below shows these figures for console software in 2006 and 2007.



On average each E-rated console software title released in 2007 earned an average of $7.6 million. The previous year the same category of software earned $7.7 million per game. A similar modest decrease can be seen in average revenue of T-rated console software. A much more significant decrease can be seen in the revenues of E10+ rated console software.

The real story here is what happened with M-rated console software. A jump of nearly 64% revenue for M-rated console games between 2006 and 2007. Much of that jump can be attributed, I believe, to just three games – but more on that later, when we use these figures to get some very interesting estimates.

On the handheld side, all ratings categories saw decreases in average revenue per game.



The explanation here is fairly straightforward: the Nintendo DS dominated the handheld software market for all of 2007 and was also home to a glut of E-rated software. Sony's PlayStation Portable sees less of this, but its uniformly anemic software sales can't really push the revenue up in any of these categories. In fact, the collapse of M-rated software revenue on portables parallels nicely with Sony's move in April 2007 to refocus PSP marketing efforts on 13- to 17-year-old consumers.

Here's the takeaway from the last two graphs: in 2007 every game in nearly every category earned less revenue on average than the same kinds of software in 2006. The only exception is M-rated console software (see the first graph), which saw more than a 60% increase in average revenue. Despite a general drop in revenue per game, the software market overall grew from $6.5 billion in 2006 to $8.6 billion in 2007, indicating a strong surge in the number of software units sold.