Hardware & Zelda Propel U.S. Games Industry Spending to Record High July

The domestic games industry is rolling with the excessive wave of warm weather hitting the States lately in that it’s heating up during these Summer months, as consumer spending in July 2021 reaching a record high for any July in history.

Industry tracking firm The NPD Group shared its latest U.S. monthly sales report this morning. In which, all signs point to continued momentum especially within hardware, even considering tight supply conditions limiting inventories in the market for next generation consoles from Sony and Microsoft. This and content spending increases notably for mobile, subscriptions and post-launch are likely bolstered by returning mandates hitting the country as variants of coronavirus spread.

Despite what a bad opinion piece from a major media outlet that I won’t link here might say, people are most certainly still enjoying games. And buying new devices on which to play them, for longer than ever.

Overall consumer spending across Content, Hardware and Accessories totaled nearly $4.6 billion in July. That’s a solid increase of 10% since this same time last year and a record amount for a July month across tracked history, dethroning last year’s $4.2 billion.

In terms of dollar sales, Content continues as the largest contributor though it was the only category of the three not to experience double-digit growth. Hardware gains proved resilient, nearly doubling year-on-year spend driven by another unit sales lead for Nintendo and PlayStation 5 continuing its historically quick start. Accessories wouldn’t be left out of the party as it actually set a July sales record of its own, influenced by a new product offering from Nintendo.

Software charts boasted two new games in the Top 3, both from storied franchises created by Japanese publishers Nintendo and Capcom. Activision Blizzard’s Call of Duty franchise had another month where two of its games ended up in the general Top 10. The real story there is how the American publisher should be called out for reports of its toxic workplace every time its games are mentioned now.

It’s time for the numbers behind an exceptional July for broad U.S. games industry spending.

United States Games Industry Sales (July 4th, 2021 – July 31st, 2021):

As I mentioned above, it was a record July month for overall monthly domestic spending on games at $4.6 billion. When expanding to 2021 as a whole, total video game sales rose 14% to $33.5 billion across the first seven months. Gaming is still the preeminent entertainment experience, especially as platform holders delve more into the subscription side appealing to folks with both traditional and on-the-go devices.

Within the largest sub-category of Content i.e. software etc, it was mobile, subscription and post-launch spending boosting sales during July to just under $4.1 billion. That’s a moderate 6% increase. Year-to-date Content currently totals $29.4 billion, moving up 12%.

The Switch Effect remains in full effect here on the overall monthly software chart. Nintendo’s hybrid platform claimed four of the Top 6 spots as console or outright exclusives, three of which are published by Nintendo and don’t even count the digital portion of their sales!

The Legend of Zelda: Skyward Sword HD took home top honors in July. I didn’t see much in the way of context here within the report, and I’d love to know how this remaster compares to the original game launching on Wii back in November 2011. All I can say is the first game debuted at #9, so I assume there’s a sizeable difference here. Will update if I hear anything.

Next at #2 is chart mainstay Call of Duty: Black Ops Cold War from Activision Blizzard, the American publisher that’s under a lawsuit because it reportedly doesn’t treat its employees well at all and fosters a “frat boy” workplace culture. The game’s latest season launched today, and I give props to every single employee working hard to keep up with its ongoing content roadmap amidst this difficult environment. Worth noting that 2019’s Call of Duty: Modern Warfare is back in the Top 10 this past month, at the ninth spot.

Capcom’s Monster Hunter Stories 2: Wings of Ruin landed third on the total rankings. The Switch title that’s also available on PC already generated triple the *lifetime* sales of the original Monster Hunter Stories 2017 release on Nintendo 3DS. Wow. NPD Group Analyst Mat Piscatella called this biggest surprise of the month, and can’t argue there. Monster Hunter as a whole gained a more global appeal since Monster Hunter: World in 2018, seemingly now to the point where even console exclusive spin-offs are gaining heavy traction.

Moving down the list, I have to point out Mario Kart 8 and MLB The Show 21. First off, who keeps buying Mario Kart? Well it’s probably anyone purchasing a Switch, right. Which is plenty of people right now. I’ve pushed back my expectations for a Mario Kart 9 every time I see it achieve a Top 5 month or reach a new milestone on global sales, which are now at over 37 million units.

Then there’s MLB The Show 21 at #7 in July, allowing it to set a new year-to-date sales record within the franchise. Not only that: Lifetime dollar sales of the game have already beat out last year’s entry to become the best ever for any MLB The Show game, a series which dates back to 2006. This is only its fourth month on sale! The multi-platform move and Xbox Game Pass decision by Major League Baseball made this game a mega hit.

The last of the new releases within the Top 20 was Neo: The World Ends With You debuting at #16. Launch month dollar sales of the Square Enix-published release started at more than double that of The World Ends With You for Nintendo DS in July 2007.

Finally, Capcom also launched The Great Ace Attorney Chronicles in July, a compilation of adventure games within the Ace Attorney series which started at the 22nd spot on the total chart.

Here’s a full look at two of the main software lists, first for the month then the year as a whole as of July.

Top-Selling Games of July 2021, U.S., All Platforms (Physical & Digital Dollar Sales):

  1. The Legend of Zelda: Skyward Sword HD*
  2. Call of Duty: Black Ops Cold War
  3. Monster Hunter Stories 2: Wings of Ruin
  4. Mario Kart 8*
  5. Minecraft
  6. Mario Golf: Super Rush*
  7. MLB The Show 21^
  8. Marvel’s Spider-Man: Miles Morales
  9. Call of Duty: Modern Warfare 2019
  10. Super Smash Bros. Ultimate*
  11. Ratchet & Clank: Rift Apart
  12. Animal Crossing: New Horizons*
  13. Tony Hawk’s Pro Skater 1+2
  14. Super Mario 3D World + Bowser’s Fury*
  15. Mortal Kombat 11
  16. Neo: The World Ends With You
  17. The Legend of Zelda: Breath of the Wild*
  18. Pokémon Sword & Shield*
  19. Resident Evil: Village
  20. Assassin’s Creed: Valhalla

Top-Selling Games, 2021 To Date, U.S., All Platforms (Physical & Digital Dollar Sales):

  1. Call of Duty: Black Ops Cold War
  2. MLB The Show 21^
  3. Resident Evil: Village
  4. Super Mario 3D World + Bowser’s Fury*
  5. Marvel’s Spider-Man: Miles Morales
  6. Monster Hunter: Rise
  7. Mario Kart 8*
  8. Minecraft
  9. Assassin’s Creed: Valhalla
  10. Animal Crossing: New Horizons*

Now, talk about explosive growth.

Hardware experienced the biggest increase of the three segments during July 2021 as sales nearly doubled year-on-year to $323 million. Up 98%, to be exact. It’s the best individual July month since upwards of $447 million back in 2008. Sounds like all three major competitors in Nintendo Switch, PlayStation 5 and Xbox Series X|S experienced increases naturally, just depends on how many boxes they can ship honestly.

Switch maintained its staggering streak of now 32 consecutive months atop the console ranks in July as measured by units sold. It’s also the year’s top-seller, by both units and dollars. Those new software title launches plus evergreens like the aforementioned Mario Kart continue to attract, and I’m very curious to see demand impact for the OLED model that hits market in October.

However, PlayStation 5 led console spending by dollar sales in July implying a higher average selling price and consistent retail demand for its supply-constrained platform. Sony’s latest generation box is still the fastest-selling home console as measured by dollar sales during its first 9 months on market. For now. It’s worth noting that next month will be the 10th for PlayStation 5, which corresponds to Switch’s first December. Even with demand as strong as it is, I don’t know if Sony can keep this streak alive given this timing and external sources limiting output.

On the Xbox side, the report didn’t shed too much light. Piscatella noted that Xbox console sales are “significantly higher” than one year back, albeit that was very late in the Xbox One life cycle.

For 2021 in aggregate, spending on Hardware jumped 50% to $2.7 billion. That’s again the best growth in the tracked sub-categories of Content, Hardware and Accessories. As we’ve seen all year, Nintendo’s Switch console is 2021’s best-selling so far. This time measured by both units and dollars. While not a shocking result, it’s certainly noteworthy for a platform starting off its fourth year on sale versus others in their early stages.

It’s time to accessorize, as July 2021 proved to be a historic month for Accessories as well.

Not to be outdone by its counterparts, spending on Accessories just set a new July record. Last year, July 2020 dollar spend was around $170 million. This year, July sales reached its brand new all-time high of $189 million.

And yes, there’s a theme. The Legend of Zelda: Skyward Sword HD Edition Joy Con debuted as the month’s top-selling accessory, no surprise really. So Nintendo’s latest launch in the Zelda franchise, even as a remaster, was responsible for the month’s best-selling game plus top accessory.

The white version of PlayStation 5’s DualSense Wireless Controller still holds the crown for now as 2021’s best-seller, driving category spending over the year so far to $1.4 billion. That’s 13% higher than the same period in 2020, almost mirroring Content spending growth.

Viewing July’s trend-lines in terms of growth within domestic games spending shows that ever since declines in the months prior to April 2021, monthly spending is now back on the rise. A July record nearly solidifies it. Spending across the industry right now reveals a blend of new audience members plus ongoing spending from casual and core players.

New software releases are helping of course, as is supply for new generation platforms. There’s consistency in both mobile and ongoing spending on the content side, and companies are selling-thru to consumers as many pieces of hardware that suppliers can push out.

It’s also the accretive nature of those people trying gaming for the first time or returning that’s defining this time over a year into the pandemic. Combined with an enthusiast audience still gobbling up Nintendo games plus pumping demand for PlayStation and Xbox, I’m not surprised by ongoing growth.

August marks what I like to consider the first major commercial push of the back half, marked by the launch of perennial seller Madden NFL from Electronic Arts. This year’s Madden NFL 2022 football franchise release kicks off on August 20th. Fully expect it to be the best-seller. August also has a couple notable updates to existing titles in Marvel’s Avengers: War for Wakanda expansion on August 17th plus August 20th’s Ghost of Tsushima Directors Cut. Even with Nintendo bereft of a major first party title and chip shortages ongoing, I’m leaning bullish on the month.

Thanks for reading, be safe and see you next time!

*Digital Sales Not Included, ^Xbox Digital Sales Not Included

Comparisons are year-over-year unless otherwise noted.

Sources: Alvaro Reyes (Photo Credit), Bloomberg, The NPD Group, Reuters (Photo Credit).

-Dom

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