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Microsoft, meanwhile, sees some slowdown as it falls behind Sony, Nintendo in sales

The NPD Group, Inc. -- a top market research firm -- has released its latest console sales report for the month of May 2014.  With the exception of one small surprise (more on that in a bit), the message is the same -- Sony Corp.'s (TYO:6758) PlayStation 4 continues to dominate sales while Microsoft Corp.'s (MSFT) Xbox One remains a feisty, but struggling challenger.

I. Nintendo, Sony Win Big as Microsoft Struggles

The company's press release did not contain specifics on how many units each company sold, but it clearly indicated that Sony's console continued to dominate sales for a fifth straight month.

As of March 31 official sales numbers put Microsoft at 5 million units sold, Sony at 7 million units sold, and Nintendo Comp., Ltd. (TYO:7974) Wii U has sold 6.17 million units.  Nintendo's console launched in Nov. 2012; Microsoft and Sony's consoles went on sale a year later in Nov. 2013.
Sony PS4 controller
Sony has thus far controlled this generation of the console race.

Of the trio of console makers, Sony has thus far seen arguably the greatest success wooing third party content, while Nintendo has had the worst luck in courting developers.

The last year has been a rocky one for Nintendo, which suffered largely due to its slow response at publishing new titles in its most popular franchises, like Kirby, Mario, Mario Kart, Smash Bros., Zelda, and Donkey Kong.  It has been forced to cut its forecasts multiple times and saw sales drop early this year.  Now its looking reinvigorated.

Due to that, while Sony held the sales crown in May, Nintendo might be the biggest winner of last month for breaking out of its nearly year long slump.  Its return to growth was driven -- by its own accounting, even -- by the much anticipated release of Mario Kart 8.  Mario Kart 8 sold roughly 1.2 million copies, good enough for second place in the NPD Group's May 2014 top selling video games list.  The NPD Group report that many of those sales have come from the bundled copy, helping to drive Wii U console sales back to growth, as well.

Mario Kart 8 has been the fastest selling Wii U title in the console's young history.  It was in third place in U.S. sales (versus second globally), showing gains in a market where Nintendo struggled throughout much of late 2013 and early 2014.

Wii U Bundle

Nintendo's 3DS title Kirby:Triple Deluxe also performed admirably, earning ninth place on the list.  According to the NPD Group, the Nintendo 3DS outsold the Xbox One (let that one sink in, for a moment), earning the ranking of second best selling system for the month (behind only the PS4).

The best-selling game in May was Watchdogs, the new techno-thriller from France's Ubisoft Entertainment SA (EPA:UBI).  It was a relatively disappointing month for Microsoft in terms of content sales.  After Titanfall scored the top spot in sales last month, this month the Electronic Arts, Inc. (EA) title plummeted to eighth place in sales, behind newer releases.  Sony, meanwhile, scored a surprise hit with its exclusive MLB 14: The Show title, which launched for the PlayStation 4 (PS4), PlayStation 3 (PS3), and PlayStation Vita (PSV).

Speaking of the PlayStation Vita, Sony's portable -- while outsold by Nintendo's 3DS -- saw some progress of its own.  A Borderlands 2 PSV bundle has sold well.  The bundle introduced the American market's first major revision of the handheld.

II. A New Gaming Golden Age

Overall hardware sales rose to $187M USD for the month, up a whopping 95 percent from May 2013 ($96M USD).  Driven by 15 percent growth in video game point and subscription cards, interactive gaming toys, and gamepads, video game peripherals and accessories saw a modest 8 percent sales rise.

Game sales were also golden in May.  Downloadable content on consoles, smartphone games, and social network gaming continues to be a massive lucrative, but poorly understood channels.  In-game microtransactions, subscriptions, mobile apps, and social network game spending totaled $787M USD (est.) for the month of May.

That's well ahead of the $274M USD in software sales that the console and portable market saw (up 57 percent).  PC games, meanwhile sold an estimated $10M USD for the month.  Consoles and portables also saw $124M USD (est.) in rental and used game sales.

WatchdogsWatchdogs was not only the top-selling game for May, it also drove Ubisoft past rival EA in total sales.

In total, the NPD group estimates consumers globally may have spent nearly $1.5B USD on the gaming industry's wares.

Comments NPD Group analyst Liam Callahan on the booming month of May:

The last time overall new physical channel growth saw a month-over-month increase of this magnitude was June 2008, with a 53 percent increase... May 2014 marked the highest selling May data month for video game point and subscription cards on record.

As seen in prior months, the lift in hardware sales was driven by console hardware, which increased 137 percent in May 2014 (vs. May 2013).  While much of May 2014's hardware growth was due to Xbox One and PS4, there was also year-over-year growth for the Wii U, and PS Vita.

Collectively, May 2014 launches sold 800 percent more in dollar sales than May 2013 launches did their respective launch months. New launches represented 50 percent of dollar sales this month, which compared to only 9 percent for new launches in May 2013.

Ubisoft may not exactly be beloved by gamers as it at times is at odds with its audience, but many gamers would be pleased to know that on the success of Watchdogs, Ubisoft is estimated to have deposed EA as the world's biggest gamemaker, in the month of May.  (EA is regularly rated the "worst company" in regards to how it treats consumers.)

III. Sony -- PS4 is the "Leading Next Gen Console"

Looking ahead, June should bring more glad tidings for the gaming industry.

Sony released a cheery statement on the NPD numbers.  Senior Vice President of PlayStation Brand Marketing Guy Longworth commented:

PlayStation continues to be the best place to play for innovative IP, as PS4 was the preferred platform for May’s biggest releases, including Watch Dogs and Wolfenstein: The New Order, and held four of the top five spots for next gen software sales. PS4 is the leading next-gen platform for sports, highlighted in May by the best-selling sports game, MLB 14: The Show.

Microsoft, after releasing comments emphasizing the positives on the last two months' NPD reports (where it got beat, but still one in some regards, such as with Titanfall's strong sales) was uncharacteristically silent, and has yet to release a comment on Xbox Wire.  It's unclear whether Microsoft will bother to say anything, given that it's virtually impossible to spin this month's sales figures in its favor.
A new Kinect-less SKU could boost the Xbox One in June. 

The Xbox One maker is likely looking forward to next month's numbers.  It's hoping that the new cheaper Kinect-less $399 Xbox One SKU, will finally manage to stem the tide of Sony's victory march.  If it can not, we're likely witnessing the two console giants reverse their roles of last generation, when Sony saw slow sales of the unprofitable PS3 and Microsoft saw booming sales of its Xbox 360.

However, it's a bit premature to come to such conclusions.  Holiday 2014 will likely decided decisively the winner(s) and loser(s) of this generation of consoles.  For now, though, anything could happen.

Sources: NPD Group, via Twice

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I actually own both consoles.....
By dxf2891 on 6/18/2014 1:14:18 PM , Rating: 2
and even though the PS4 has better, more powerful hardware, it's the XBOne that gets more playing time. Firstly, due to the network (Xbox Live is infinitely better than the PSN) and secondly there's is no killer multiplayer game to PWN you friends on for the PS4. As limited as it is, at least XBOne has Titanfall. The formula is simple, make a console with decent games that allow you to humiliate and belittle your friends and colleagues on by embarrassing them on their gaming prowess, lolbvs!!!!

By nikon133 on 6/18/2014 3:39:20 PM , Rating: 2
I keep hearing that about Live vs. PSN... but it's not universally true. PSN was missing some features, but core functionality was solid. I ended up playing much more BF3 on PS3 than on PC, though I had both versions. Connectivity, in-game audio... even number of available servers... were better on PS3. Portal 2 had co-op with PC enabled, something I used a lot, playing with my PC friend. MAG had 256 players fights, quite an on-line achievement for last gen. In all my online time on PS3, I never felt I was missing something really important... and it was free.

I don't know how is PSN standing against Live today. Sony has/is/will be adding functionality and services, like games streaming, screenshots and gameplay videos sharing, friends inviting. Not sure where is MS driving Live, but I'd expect they both have upped their games... But if someone has found good comparison, please share.

By OnyxNite on 6/18/2014 3:56:29 PM , Rating: 2
You are not representative of the console buying public. Titanfall is a good game but it's not the great system selling savior MS hoped it would be. It's all the way down to #8 in sales and that is COMBINED. The fact that they combine sales of all versions is the only reason it was #1 in the first place. Infamous: Second Son for the PS4 outsold Titanfall for the Xbox One only. Titanfall dominated because they added in PC sales and Xbox 360 as well whereas Infamous is PS4 ONLY. Titanfall is the ONLY game in the top 10 that is on Xbox One but not PS4. Every other game is either on both or neither. When games are available on both the PS4 version is outselling the Xbox One version almost 2:1, not just by some small percentage. It's so bad that on the week ending June 7th Watch_Dogs for the 360 outsold Watch_Dogs for the Xbox One. So sure, maybe you play your Xbox One more than your PS4 but if that's true you are clearly in the minority. Hopefully the price drop, the removal of the pay wall, and allowing developers to use the extra 10% formerly reserved for Kinect will change things next month. It's really not good for gamers as a whole to have one company run away with this generation. At this point though it's questionable if MS can even catch Nintendo (with their year lead) let alone catch up to the PS4.

By degobah77 on 6/19/2014 8:52:47 AM , Rating: 2
Same here, if a game is available on PS4 and XBox, I get the Xbox version. The PS4 gets minimal play, while my XOne is turned on every day. And whatever graphical difference there may be is indistinguishable when actually playing a game.

Also, Infamous: Second Son was a terrible let down.

By Reclaimer77 on 6/19/2014 6:06:01 PM , Rating: 2
Titanfall is just the same old sh*t though. Limited maps. Limited player caps. Basically COD with mechs, yawn.

Planetside 2 is coming to the PS4. The PS4 will have the best shooter AND the best MMO on the console market, hands down.

"I want people to see my movies in the best formats possible. For [Paramount] to deny people who have Blu-ray sucks!" -- Movie Director Michael Bay

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