Time is marching on through the latter parts of 2022, and with it comes the first monthly sales report of the fourth quarter from games industry tracking firm The NPD Group.
Ironically, considering it was the spooky season, October proved to be much less scary than most of the year as it broke a long-running downward streak. It’s the first month in exactly one year during which spending on games didn’t show a year-on-year decline, boosted by a new Call of Duty, improving hardware inventories and easing of inflationary concerns.
Overall consumer spending across the three categories of Video Game Content, Hardware and Accessories was flat year-on-year, as the largest category of Content moved up slightly. The Hardware segment dipped double-digits, primarily due to a decline in non-PlayStation or Xbox platforms, i.e. Nintendo Switch.
Not bad in general, considering this time last year was the best October on record!
It helps to feature what will likely be the year’s biggest-selling game in Call of Duty: Modern Warfare 2, which (expectedly) topped the overall software chart. That makes 15 consecutive years where a Call of Duty title won its debut month. Which is a staggering result for the annualized military shooter especially since many so-called experts have consistently, and incorrectly, called for its demise.
Not only that, as happens this later in the year, the premium software chart was sprinkled with a variety of additional new releases. October saw five new games rank within the Top 10, and three more between #11 and #20. In addition to the aforementioned Call of Duty, the likes of Gotham Knights, NHL 23, Mario + Rabbids: Sparks of Hope and Bayonetta 3 all generated enough revenue to start in the Top 10, driving Content spend upward despite softness in mobile.
Within Hardware, the PlayStation 5 continued its dominance in October, winning out by both dollar sales and units sold. As it has for three months now. What’s reassuring is how Sony’s family of PlayStation 5 devices along with Microsoft’s Xbox Series X|S family both generated double-digit gains. For four months running. Sensing a burgeoning trend now that supply is getting better? It just took a bit for this generation to get going, seeing as it began during a global pandemic and all.
“October growth in digital sales and subscriptions for console and PC video game content, driven in large part by the release of Call of Duty: Modern Warfare 2, was offset by declines in mobile content and hardware,” wrote The NPD Group’s Mat Piscatella on Twitter.
Signals in October and recent months point to a trend towards increased buying on premium software as the calendar became busier, demand meeting or exceeding console supply and spending bumping up because of it. Prices indicators overall are plateauing right now in the States, so spending power is better than it was earlier in the year. Even as folks are spending less on mobile, other areas are boosting the results.
Read more below as I dig into the domestic sales trends and list out the latest software rankings.
United States Games Industry Sales (October 2nd, 2022 – October 29, 2022)
Looking at the above slides provided by The NPD Group, total monthly sales across the U.S. games industry stayed constant since last year at $4.27 billion. The green trend-line, which shows percentage change against prior year, has been moving mostly upwards since mid-year. I’d say this is the single most important takeaway from recent reports. Essentially, the rate at which spending declined in the back half of the year is improving.
Expanding to the first ten months of 2022 now, spending is still down 7% at $42.7 billion. This is mainly due to headwinds within Content as Hardware is showing a modest decline. There’s worse-than-expected output from mobile and a lighter premium software release slate until just recently in the fourth quarter.
Content as a segment, which includes software sales in addition to subscriptions and mobile, has returned to year-on-year growth, edging up 2% in October to $3.7 billion. Its contribution to overall sales was nearly 87%, compared to 85.5% this time last year. As for annual figures so far, Content has contracted 8% to $37.19 billion. That’s an improvement since last month, when it was trending down 9%, due to the October growth boosted by big budget new launches.
Mobile is traditionally the largest contributor within the Content segment. Unfortunately, last month’s report doesn’t shed much light into this other than to state spending was lower year-over-year. One tidbit from a GamesBeat article highlights how mobile spending could decline in 2022 for the first time in tracked history, an intriguing dynamic given how people are on the go more lately.
Within premium, October’s winner of Call of Duty: Modern Warfare 2 is also already the second best-selling game of the year, behind only Elden Ring. One element here is how Activision Blizzard employed a more staggered launch schedule for this year’s title, which seemingly attracted people earlier. Its story campaign dropped on October 21st while the full game hit market on October 28th.
This domestic debut fits the broader narrative of Modern Warfare as the premier sub-brand within the series. This year’s game, which shares a title with the 2009 classic, generated $800 million during its opening weekend and reached $1 billion in sales within ten days on market, becoming the fastest-selling Call of Duty in history and second fastest-selling game ever behind Grand Theft Auto V. (No wonder Microsoft is willing to pay so much for the publisher.)
Moving down the list, Gotham Knights snagged second place in what I’d call the biggest surprise of the month. Despite middling critical reception, the Warner Bros-published game clearly benefited from brand awareness as part of the DC Comics universe. Even without the Bat himself being playable. As a quick comparison point, Batman: Arkham Knight started atop the June 2015 software chart.
Then it’s the sports games, All from American publisher Electronic Arts. Both FIFA 23 and Madden NFL 23 dropped a couple spots respectively to 3rd and 4th. The next highest-ranked new title on October’s list was NHL 23, which scored 5th. This is a notable improvement compared to its predecessor, which dropped at 9th in October 2021.
Coming up next at #6 was Nintendo Switch exclusive Mario + Rabbids: Sparks of Hope. The collaboration between Ubisoft and Nintendo is a sequel to Mario + Rabbids: Kingdom Battle, a title that launched one spot higher in September 2017. (When, I might add, my beloved Destiny 2 was the month’s top earner.)
The final new game among the Top 10 last month was another Nintendo Switch exclusive in Bayonetta 3. Platinum Games’ latest in the long-running franchise is the first to launch on Switch, landing in 9th. It’s tricky to compare to prior games because they started on the failed Nintendo Wii U, which had quite the limited install base. One caveat is digital is not included for Nintendo-published games such as this one.
In terms of other new releases securing spots among the Top 20, there’s Star Ocean: The Divine Force at #14 and Dragon Ball: The Breakers at #16, while PGA Tour 2K23 teed off one spot lower at #17. And while it’s not a brand new title, Persona 5 experienced a massive jump up to seventh place due to its release on a variety of new platforms, including Xbox and Nintendo Switch.
Expanding to the current annual ranks, Elden Rings has held off Call of Duty: Modern Warfare 2 for the time being. Bandai Namco announced recently that FromSoftware’s latest reached an impressive 17.5 million copies sold globally. I expect this dynamic in the U.S. will swap come next month, when Call of Duty: Modern Warfare 2 will become the year’s best earner. Otherwise, FIFA 23 bounces into the Top 10, settling at #8, while Gotham Knights continues its impressive start being already the 14th top-selling game of 2022.
Here’s the full list of best-sellers for last month and the year through October.
Top-Selling Games of October 2022, U.S., All Platforms (Physical & Digital Dollar Sales):
- Call of Duty: Modern Warfare 2
- Gotham Knights
- FIFA 23
- Madden NFL 23
- NHL 23
- Mario + Rabbids: Sparks of Hope
- Persona 5
- NBA 2K23*
- Bayonetta 3*
- Elden Ring
- Mario Kart 8*
- Splatoon 3*
- Star Ocean: The Divine Force
- Dragon Ball: The Breakers
- PGA Tour 2K23*
- Nintendo Switch Sports*
- NieR: Automata
- Super Smash Bros. Ultimate*
Top-Selling Games of 2022 So Far, U.S., All Platforms (Physical & Digital Dollar Sales):
- Elden Ring
- Call of Duty: Modern Warfare 2
- LEGO Star Wars: The Skywalker Saga
- Madden NFL 23
- Pokémon Legends: Arceus*
- Horizon Forbidden West
- MLB: The Show 22^
- FIFA 23
- Call of Duty: Vanguard
- Gran Turismo 7
- Mario Kart 8*
- Kirby and the Forgotten Land*
- Gotham Knights
- Nintendo Switch Sports*
- Saints Row
- Madden NFL 22
- Super Smash Bros. Ultimate
- FIFA 22
- Marvel’s Spider-Man Miles Morales
Console sales, which rose almost 20% in September, returned to a decline last month. Consumer spending on Hardware as a category declined 10% in October to $424 million. This happened despite solid double-digit growth for PlayStation 5 and Xbox Series X|S, implying that Nintendo Switch made up the difference on the downside.
Intriguingly this didn’t have a substantial impact on the trend for 2022 to date, as Hardware spend is currently $3.78 billion or 2% lower than last year’s $3.87 billion thru the same time frame. That’s only down modestly from a 1% decline as of September. This tells me that availability is still better than it’s been in a long while, even if Nintendo Switch is aging into the back part of its life cycle.
As I predicted would happen last month, I mentioned earlier that PlayStation 5 won October on both dollar sales and units. Sony has been able to shore up its pipeline and suppliers are outputting more boxes to meet demand, and those folks that want a PlayStation 5 are certainly buying when they find one. In my article on Sony’s recent rules, I noted that PlayStation 5 lifetime unit sales reached 25 million. While it’s currently selling at a slower pace than PlayStation 4, the company is way upbeat on the remainder of this fiscal year through March 2023.
One additional note from The NPD Group is Xbox Series X|S landed in second place during October, reaffirming my inference that Nintendo Switch is starting to saturate its potential audience.
On the year so far, PlayStation 5 continues its lead on dollar sales followed by Xbox Series X|S and Nintendo Switch, in that order. When measured by units, Nintendo Switch is still in the lead driven by its lower price point. PlayStation 5 is next, while Xbox Series X|S is in third by that metric.
This checks out, as the higher-priced current generation is making more money per unit sold than Nintendo’s older hardware. Not to mention, there’s more demand for the shiny new boxes. Though Nintendo does benefit from families and households buying multiple devices, a situation that will benefit it during this upcoming holiday period. The Switch recently passed 114 million units globally, still the third best-selling home and handheld console of all time.
In what I’d call the most disappointing result, mainly because it missed my more upbeat expectation after a solid September, Accessories experience 8% lower sales in October to $148 million. Apparently, a new game pad from Microsoft in the Xbox Elite Controller Series 2 Core wasn’t as attractive, maybe due to its pricing that’s above the likes of entry level controllers. Perhaps there were declines elsewhere that dragged the segment down.
Annual spending on Accessories for 2022 is currently down 12% from last year’s $1.95 billion, totaling $1.72 billion through the first ten months of this year.
During October, Sony’s PlayStation 5 Dual Sense Midnight Black was the month’s top-selling peripheral, a flip from September when it was the base level black Xbox Wireless Controller. Microsoft’s Xbox Elite Series 2 Wireless Controller is still tops for the year, as I confirmed directly with The NPD Group.
As far as monthly results go for commercial output of the domestic games industry, October was the steadiest in recent history. Prior to last month, we had seen 11 consecutive months of spending declines.
This sort of rebound is especially noteworthy since it’s compared against a record-breaking October last year. The Call of Duty effect is of course a big plus, alongside a great showing from Gotham Knights plus those annualized sports titles signaling a ramp up to the holiday shopping season.
Checking ahead to November, which includes the bellwether Black Friday period, I’m anticipating growth in overall domestic spending. Likely in the mid-to-high single digits. Mainly because of the better console inventories, massive PlayStation and Nintendo software launches and a chance for accessories to benefit from deals.
Even considering Call of Duty: Vanguard launching last November, I’m guessing the Content category will be flat or maybe a slight decline. I expect Call of Duty: Modern Warfare 2 will repeat as the top-seller, with both Sony’s God of War: Ragnarök and The Pokémon Company’s Pokémon Scarlet & Pokémon Violet close on its heels. Because the former includes digital, and it’s going to have a potential record-setting debut for a PlayStation exclusive, I firmly believe it can secure second place.
For Hardware, PlayStation 5 should take November on revenue as it will still retain its pricing. I’m much less certain on units sold. I think Nintendo Switch can win by this metric, given the incredible popularity of Pokémon as a franchise.
There we have the latest U.S. sales recap, and predictions as the year begins its end. I highly recommend checking out Piscatella’s thread here, a bittersweet one since apparently it will be the second-to-last NPD report on Twitter. The company is changing formats to a more formal press release style. You know I’ll still cover it here and on social media, regardless of how it’s announced!
Thanks everyone for taking the time to visit the site. Here’s wishing everyone a great November, and a Happy Thanksgiving to everyone that celebrates. Take care and be well!
*Digital Sales Not Included, ^Xbox & Switch Digital Sales Not Included
Note: Comparisons are year-over-year unless otherwise mentioned.
Sources: Activision Blizzard, Bandai Namco, GamesBeat, Newsweek (Image Credit), The NPD Group, Sony Corp.