Why are NPD numbers important?

NPD is a retail market research group which provides monthly statistics on video games and consoles sales. Each month, market analysts and the whole distribution channel of video games stop to see what data has NPD collected, and then use the data to understand the market trends and forecast the demands for the subsequent months. Even the Big 3 – Nintendo, Sony and Microsoft give face to this data and response with their monthly PR spins. The console manufacturers has to know what is their sell-through rate, i.e. percentage of retail figures to shipment figures.

NPD has a big umbrella of large and small retailers that feed them with weekly or monthly sales data. They cover 60-70% of the whole market. These retailers are being paid for their data, which NPD in turn sell the processed data to different companies. The numbers we see are just a grand summary of the report those companies paid for. They are enough for end consumer like us to know.

And why companies are interested to find out the US retail sales? Because, obviously, US is the biggest video game market in the World right now. Japan is slowly diminishing as a video game country, as their people are heavily biased towards handhelds, except the Wii. On the other hand, Europe is still catching up. US, being the largest market, is the main factor why XBOX360 can survive and flourish.

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