Eric Johnson

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NPD Reports Year-Over-Year Decrease in Gaming Hardware, Increase in Software (Again)

up_down_flatNo surprise: Once again, U.S. gaming hardware sales are down year over year, according to the latest numbers put out by the NPD Group today. Between October 2012 and October 2013, hardware sales dropped 8 percent to $171.7 million across all platforms.

That’s to be expected, as the long-hyped “next generation” of that hardware (excluding Nintendo’s lukewarmly received Wii U, which came out last year) effectively starts tomorrow with the North American launch of Sony’s PlayStation 4. But it gives us a baseline for what to expect in next month’s report, which will include the launch of both the PS4 and Microsoft’s Xbox One, not to mention the bonanza of capitalism known as Black Friday.

More tellingly, NPD reports that software sales continue to climb on the backs of some big titles that came out ahead of the holiday rush, like Grand Theft Auto V, Pokemon X & Y, Battlefield 4 and Batman: Arkham Origins. Retail software sales rose 12 percent year over year to $482.5 million. Factoring in used games, rentals and digital spend on all types of games — including those on social and mobile platforms — “the total consumer spend in October is just over $1.3 billion,” analyst Liam Callahan was quoted as saying in a press release.

For the sixth consecutive month, the top-selling gaming hardware device was Nintendo’s 3DS (enjoy it while it lasts!), which got a big boost from the new Pokemon games. After the PlayStation 3 broke its 32-month winning streak last month, an upset attributed to a Sony-exclusive Grand Theft Auto bundle, the Xbox 360 reclaimed its spot as the top-selling console in October.

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I think the NSA has a job to do and we need the NSA. But as (physicist) Robert Oppenheimer said, “When you see something that is technically sweet, you go ahead and do it and argue about what to do about it only after you’ve had your technical success. That is the way it was with the atomic bomb.”

— Phil Zimmerman, PGP inventor and Silent Circle co-founder, in an interview with Om Malik