Level up! Video Game Industry Revenues Soar in 2015

February 16, 2016, 4:49 PM UTC
Nintendo's Super Smash Bros.
A screenshot from Nintendo's Super Smash Bros. video game.
Courtesy of Nintendo

Video game companies collected a lot of gold coins in 2015.

Total revenues for the industry in the U.S. hit $23.5 billion last year—a 5% jump over 2014, according to the Entertainment Software Association, the industry lobbying body, which also hosts the E3 trade show in June.

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In news that’s likely to make investors happy, software sales were a big part of that increase, jumping 7% from the 2014 figures to $16.5 billion. (While hardware sales are important, software sales are largely viewed as the best barometer of the industry’s growth and overall health.)

“Our products are revolutionizing how we consume and interact with media,” said Michael D. Gallagher, president and CEO of the ESA. “We know that hardware and software innovations have established this industry as a leader in high-tech development.”

The ESA numbers are notably bigger than the early estimate of the industry’s 2015 revenues from The NPD Group. In January, that group said game companies had total brick and mortar sales of $13.13 billion. The ESA says its numbers include not just physical packaged goods, but subscriptions, digital sales, and mobile games. The group did not detail where it obtained the information from, however.

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Both the PlayStation 4 and Xbox One saw their best sales month ever in December 2015. Life to date, Sony (SNE) has sold 35.9 million PS4 units worldwide. Microsoft (MSFT) has not released updated Xbox One sales figures in over a year, but Electronic Arts (EA) recently estimated the console’s installed base at 19 million units.

Sales of consoles may be peaking, too. While the ESA did not break out hardware sales in its 2015 figures, January 2016 saw an 8% drop in sales of eighth generation consoles (the PS4 and Xbox One). Previous generation sales (the Xbox 360 and PS3) have tumbled off a cliff, falling 81% in January compared to January 2015, according to NPD.

It’s possible the current generation hardware sales hiccup could be an aberration due to a lack of big releases, though. Several big titles are due out this year, including Uncharted 4, Mass Effect: Andromeda, Doom, The Last Guardian, and Dark Souls III, which could spur many older game system owners to buy a current generation machine.

For more on Xbox Live:

Later this year, Nintendo (NTDOY) will begin talking about its next hardware system—the NX. (Don’t expect to hear anything from Sony or Microsoft, though. We’re just three years into the lifespan of the PS4 and Xbox One, meaning it will likely be another four of five years before either company begins talking next generation.)

Perhaps because of the strong software channel, the people who track the industry’s sales say they expect overall growth to continue for several years.

“The industry’s sales performance helped to make 2015 a banner year for video games; and we anticipate continued growth in multiple industry sectors for 2016,” said Joanne Hageman, president at the NPD Group.

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