Last month the debut of Grand Theft Auto IV was virtually guaranteed to influence gaming sales results and despite its late in the month release, with just a few days of sales, that’s exactly what it did.   Now another month has passed and a more detailed GTA IV sales picture is starting to appear along with the rest of the NPD North American retail numbers that were released this week.

For the month of May, GTA IV remained at the top of the gaming charts.   The Xbox 360 Version moved 871k units to finish in the top slot.  The PS3 installment finished fourth.  Cumulatively, across platforms, GTA IV moved 1.314 million units.  That’s a sizable drop from April’s 2.85m total units but still an extremely high volume of sales; a number appropriate to its blockbuster status. 

The questions are: how will these numbers match up to projections?  Is GTA IV going to be the all time best seller? If so, by how much?  And perhaps even more importantly, were pre-sales forecasts that used Halo data spread from one to two platforms accurate?  

GTA IV sales are being closely watched because they are a core element in EA’s (ERTS) pending takeover offer for Take Two (TTWO).   As the data comes out around the world, and with June’s retail data released in another month,  the answers should be much more clear.  For now it remains a sketch.

One element that does seem clear already, the game isn’t driving hardware sales the way some expected.   Just the opposite, sales were down for both consoles (month to month, not year over year).  For the month of May, the PlayStation 3 beat the Xbox 360 selling 208,700 units to Microsoft's (MSFT) 186,600.  

NPD analyst Anita Frasier didn’t rule out the possibility that the games could influence sales into June saying, “The continued success of GTA IV is not translating into big hardware sales for either the PS3 or the 360, but there may yet to be a lift in June due to gift-giving for Father’s Day and Graduations.”  

The prospect of a modest sales surge does remain possibility but is not likely. Supporting that is a software hardware correlation: Xbox sales of the title beat PS3 sales by a factor of nearly 2:1 yet Xbox console sales remained flat month to month (and PS3 momentum was positive). If the game were poised to drive console soles, momentum on both the Xbox console and title would be expected to be similar. So far they’re not.

If a sales surge doesn’t happen, the total addressable market for GTA IV sales (number of consoles outstanding) could pose a ceiling for the title’s sales prospects. That will be a story to watch for and could tie immediately back to pro/con arguments made over EA’s valuation.

Getting back to the broad data: For the month, in total the industry churned out $1.12 billion in sales, down from April’s $1.23b month to month, but another substantial double digit year over year gain (37%). With April beating year over year results by 47% and January and February similarly strong, the year over year uptick is starting to seem like the norm. 

In hardware, sales also seem to be following familiar patterns. Overall, the industry turned out a 34% year over year gain with revenue of $428.6m.   Once again, also true to pattern, Nintendo (NTDOY.PK) easily led the competitive field.  For the fourth month in a row the Wii and DS held the top two spots in hardware sales.  The Wii moved 657k units and the DS, which some have feared peaking, showed resiliency and turned in 452k units. Sony (SNE) took the middle slot with the PS3 showing some positive sales momentum in the console category but they fell off a little on sales with the portable PSP. Microsoft sales were relatively flat showing similar month to month sales tallies.

Software, supported carry over from the late release of both GTA IV and Mario Kart in April had no problem turning in a strong monthly tab. With those two and the Wii Fit package helping lead the way, total sales were $536.9m, a 41% year over year gain. 

If GTA IV was the expected story, Nintendo’s software sales, might be the month's scene stealer. In May, Mario Kart moved 787k units to take the number two slot and Wii Fit entered in number three with 687K units (an especially strong result given product shortages). Out of the top ten, across portable and console categories, Nintendo grabbed six slots.  Total unit sales were a combined 1.53m for Nintendo – better than GTA IV, or any other publisher’s performance.

All in all, for a spring month filled with outdoor activities and other entertainment options, the gaming industry continued to more than hold its own.  In fact, according to Frazier, "The industry is on pace to achieve revenues in the $21-$23B range for 2008."

The rest of the data by the numbers:

THE MAY NUMBERS

May Hardware Sales (in units sold) (April Result)

• Wii: 675,100 (713,000)
• Nintendo DS:  452,600 (415,000)
• PlayStation 3: 208,700 (187,00)
• Xbox 360: 186,600  (188,000)
• PlayStation Portable: 182,300 (193,000)

*NPD chose not to report on Playstation 2 sales this month in an apparent move to keep focus solely on current generation platforms.  From here forward the PS2 will be excluded.

May Software (Title (Platform/Publisher/Units))

1. Grand Theft Auto IV (Xbox 360 / Take-Two / 360 / 871,300)
2. Mario Kart Wii w/ Wheel (WII / Nintendo / 787,400)
3. Wii Fit w/ Balance Board (WII / Nintendo / 687,700)
4. Grand Theft Auto IV (PS3 / Take-Two / 442,900)
5. Wii Play w/ Remote (WII / Nintendo / 294,600)
6. Super Smash Bros. Brawl (WII / Nintendo / 171,100)
7. Iron Man (PS2 / Sega / 130,600)
8. Guitar Hero III: Legends of Rock w/ Guitar (WII / Activision / 116,800)
9. Pokemon Mystery Dungeon: Explorers of Darkness (DS / Nintendo / 107,000)
10. Pokemon Mystery Dungeon: Explorers of Time (DS / Nintendo / 102,000)

Overall Industry Totals (Total ( % Change Y/Y)(Last month’s total))

• Video Games: $1.12 (+37%) ($1.23 billion)
• Video Games Hardware: $428.6m (+34%) ($426.2m)
• Video Games Software: $536.9m (+68%) ($654.7m)
• Video Game Accessories: $150.8m  (+39%) ( $154m)

For comparative data, NPD’s data from each month for the past year can be found by clicking the names of the month as follows:

2008: •January  •February •March •April

2007: •February •March •April •May •June •July •August •September •October •November •December

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Seth Gilbert

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