NPD To Start Reporting Revenues From Digital Sales
The NPD Group is an entity that provides market information and advisory services to multiple companies in the gaming industry, leading companies use their data to analyze and uncover emerging needs, consumer behaviors and video game and PC game trends.
However, their data has a weak point: digital sales information.
The fact that they don’t and couldn’t provide information regarding digital revenue has turned into a serious problem as the industry veers towards digital downloads; I bet we all know and understand the importance of tracking and reporting revenues from digital platforms, paid downloads, subscriptions, mobile etc. Any report that focuses only on physical retail data would be skewed and incomplete, and companies could end up using biased information as input for their critical decisions.
Today, the NPD has stated that they will provide digital POS data before the year is out and that they are actively working towards that goal. It’s not an easy task however, some of the biggest players on digital platforms like Steam lock down their sales data (rightfully so)--therefore, it’s hard to paint an accurate picture of the health of the games industry when the big numbers are lock down so tightly.
“We fully realize that the market needs the same level of information for the digital categories as exists for the physical business today," Games group president David McQuillan.
According to McQuillan, the NPD wants to prepare for the new generation of consoles hitting shelves this holiday; hence their intention of releasing digital POS (Point-of-Sale) data ASAP.
"The progress on that effort up until recently has been slow and frustrating at times, but today I am very happy to share that the pace of progress has changed recently. NPD has formed a leader panel to track digital POS sales of full game and add-on content downloads."
The leader panel includes “leading games publishers” and will focus on full-game downloads and DLC for PC, consoles and mobile devices. The program is in an early phase but they plan to bring a reliable system before the end of the year.
Up to this point the NPD has been able to provide information on downloads of full games, add-on content, subscriptions but they can’t access numbers from digital platforms such as Steam, Xbox Live Marketplace and PlayStation Network which is why companies like EA have been outspoken about the accuracy of their reports calling them “a misrepresentation of the entire industry”
"Once we move past the beta or proof of concept phase, subscribers will have access to the full data set, which you would expect of any service,"
When asked why it took the NPD so long to provide such valuable information McQuillan said, "If it was easy it would have already been accomplished."
And to be fair, it has to be a daunting task; I don’t think leading digital platform holders would easily give carte blanche to anyone and everyone to access their information. In fact, I think the NPD had to fight and beg to get snips of information about POS data from major companies.
If successful, the new format could give valuable information about the digital marketplace, certainly its importance will continue to grow over the years as major companies like Sony and Microsoft push towards digital distribution and Valve’s Steam gains momentum.