• The PlayStation 3 sold an estimated 1.4 million units of software in February 2008, for launch-to-date (LTD) software sales of 16.5 million units. In February 2008 we estimate that PS3 software had an average sale price (ASP) of $66.
• The Wii sold 2.9 million units of software in February 2008, for an estimated LTD software sales of 40 million units. In February 2008 Wii software had an ASP of $45.
• The Xbox 360 sold an estimated 2.7 million units of software in February 2008, for a known LTD software sales of 69.3 million units. In February 2008 we estimate that Xbox 360 software had an ASP of $66.

For reference, the ASP for software across the entire industry was $39.46, according to Michael Pachter. On the handheld side, the ASP for Nintendo DS software is $29.90.

Industry Dollars

In February 2008, videogame industry revenue grew 34% overall to $1.3 billion for the month. For the current generation of systems, the following three graphs show our estimates for how strong each platform is in the categories of hardware, software, and accessories revenue.



On the back of stronger sales and its higher price, the PlayStation 3 is generating 37% of the current generation hardware revenue. The less expensive Wii is selling well enough to also take just over 1/3 of current generation hardware dollars.



With its larger installed hardware base, higher attach rate, and average sale price over $60 per game, the Xbox 360 has an advantage when it comes to generating software revenue. For its installed base, the PlayStation 3 is still doing well, and the Wii is moving a lot of software units albeit at a lower sale price.



Accessories are an important high-margin market, both for third and first parties, and again the Xbox 360 has a clear advantage. However, the number of dollars spent on accessories for the Wii is very substantial and over twice that spent on accessories for the PlayStation 3.

Given the amazing growth of the industry in 2007, it is even more remarkable that such growth has continued into 2008 even as the United States economy appears to be headed for (if not already in) a recession. As a measure of just how flush the market was with money in January and February, the following graph gives the revenue for the first two months of the year since 2005.



What we find astonishing about this graph is the following: revenue for the single month of February 2008 is only 4% below the total revenue for the two months of January and February 2006.

Finally, we can begin to add the year 2008 to our total industry revenue graph, which now covers data from four years.



Analysts are currently projecting double-digit growth for the industry in 2008, with some putting growth as high as 19%. Should these projections pan out, the industry could easily pass $20 billion for the year, even going as high as $21 billion by the end of December 2008.

Acknowledgments

We wish to thank the NPD Group for the use of its data and especially to Anita Frazier for her comments on the industry.