NPD Reports A Strong Holiday SeasonOver 43 percent of NPD Respondents Surveyed Spent More Than Seven Hours Per Week Playing Video Games on Their Next Generation Systems Despite dollar declines for the total video games industry in the first eight months of 2003, NPD analysts suggest a strong holiday season. According to leading market information company The NPD Group, the total video games industry experienced a 3.4 percent decline in dollar volume January to August 2003 versus January to August 2002. The good news is unit volume for the total video games industry has increased 8.4 percent during the same time period. NPD reported total console and portable hardware sales declined 5.1 percent in unit volume and 18.5 percent in dollar volume January to August 2003 versus January to August 2002. Console and portable accessory sales declined slightly, two percent in both units and dollars January to August 2003 versus the same time period in 2002. More importantly, console and portable software sales showed increases in units as well as dollars, 14 and 5.7 percent, respectively, January to August 2003 versus January to August 2002. In the first eight months of 2003, the two software categories comprised of more than half of the industrys unit and dollar sales. "The continuous rise in unit volume is good news for the video games industry," said Richard Ow, video game analyst, The NPD Group. "The most important factor is product is being sold at a faster pace than last year. Dollar decline is to be expected during the current video games cycle. The next couple of months will be critical for the industry, with highly-anticipated releases on the way. Over the next few years, software will be the primary driver for industry growth for the current next generation life cycle." The rationale behind a strong holiday season lends itself to the following factors: -- The mass market is making an impact in the video games industry: Growth in particular genres, Action and Family Entertainment have shown the biggest unit growths, 33 percent each. -- More than 50 percent of software is selling under $40 price points across all console platforms: Over 270 new releases in 2003 are selling under $40 price points. -- More value through console bundles: Console hardware manufacturers will bring more value to consumers when adding a title or an accessory to the console system. -- Growth in tie ratio: The software to hardware ratio for each next generation platform has grown significantly.