EA & Activision Dismiss NPD Data

EA & Activision Dismiss NPD Data

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Because NPD isn't providing monthly evaluations of digital sales, some of the biggest players in the videogame industry are publicly dismissing the group's monthly reports.

Last Friday, NPD reported that videogame sales were down eight percent in February. As a result, CNN is reporting that publishers Electronic Arts and Activision have stated that NPD's reports are misleading and "potentially irrelevant." Essentially, publishers have a problem with NPD because it doesn't track sales in digital marketplaces like the PlayStation Network and Xbox Live.

"Using NPD data for video game sales is like measuring music sales and ignoring something called iTunes," said EA's Tiffany Steckler. "We see NPD's data as a misrepresentation of the entire industry."

Meanwhile, Anitz Frazier (an NPD analyst) explained NPD does release a report that focuses on digital sales, though it only comes out once a quarter: "This is in addition to what we are best known for and that is our monthly reporting of new physical sales occuring at retail."

Members of the industry dismissing NPD's information isn't all that uncommon. When sales are good, companies will often mention how popular a game is in future advertising, while the data is often publicly ignored if it isn't what a publisher wants to hear.

Unsurprisingly, Michael Pachter weighed in on the issue, saying it was a "gross overstatement" to totally dismiss NPD's information because physical sales are still a huge part of the industry: "EA saying physical game sales don't matter is like Best Buy saying television sales don't matter."

In this case, it's hard not to agree with the publishers. Digital sales (not to mention online subscriptions for games like World of Warcraft) are certainly a major part of today's videogame marketplace. Case in point: Electronic Arts' digital sales reported that it expects its yearly digital revenues to climb to a to a total of $750 million by March 31st. From the sound of things, it seems like NPD is going to have to change its reporting methods if it wants to continue being taken seriously.

Source: CNN via Spong

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I'd like to see Best Buy stay in business only selling televisions.

vansau:
Electronic Arts and Activision have stated that NPD's reports are misleading and "potentially irrelevant."

Pot. Kettle. Ethnic.

How many of EA/Activision's press releases have been "misleading/potentially irrelevant."

"Taking the fun out of games" or "Your Mother wouldn't like this game"?

(PS: Thank god that didn't rattle out 5 times)

I don't think EA and Activision are saying ONLY digital sales should count. Retail and Digital sales are both large parts of the industry, especially on PC, so ignoring either is stupid. Both should be accounted for.

TheDoomPenguin:
I don't think EA and Activision are saying ONLY digital sales should count. Retail and Digital sales are both large parts of the industry, especially on PC, so ignoring either is stupid. Both should be accounted for.

Exactly that's what they are saying. While there is a quarterly report on digital sales, EA/Activision don't think it is enough anymore as the digital market is steadily growing and not to be underestimated as it can skew the data severely.

sidenote: the abbreviation "NPD" is used for a german neonazi party as well. confusion...

Femaref:

TheDoomPenguin:
I don't think EA and Activision are saying ONLY digital sales should count. Retail and Digital sales are both large parts of the industry, especially on PC, so ignoring either is stupid. Both should be accounted for.

Exactly that's what they are saying. While there is a quarterly report on digital sales, EA/Activision don't think it is enough anymore as the digital market is steadily growing and not to be underestimated as it can skew the data severely.

sidenote: the abbreviation "NPD" is used for a german neonazi party as well. confusion...

It's also a personality disorder.

It's hard to agree with the big publishers, but they're hard on this one. If taking music sales into account without counting iTunes is bad, imagine when you're talking about a demographic that is, by definition, more tech-savvy.

ReturnPostage:

Femaref:

TheDoomPenguin:
I don't think EA and Activision are saying ONLY digital sales should count. Retail and Digital sales are both large parts of the industry, especially on PC, so ignoring either is stupid. Both should be accounted for.

Exactly that's what they are saying. While there is a quarterly report on digital sales, EA/Activision don't think it is enough anymore as the digital market is steadily growing and not to be underestimated as it can skew the data severely.

sidenote: the abbreviation "NPD" is used for a german neonazi party as well. confusion...

It's also a personality disorder.

Which many are suggesting should be removed for DSM-V.

OT: I know Kotick and his counterparts at EA REALLY want that point about iTunes to be valid, but it isn't just yet.

Physical distribution still constitutes the majority of games sales when you're talking about total revenue. Such is not the case with music sales. NPD is much less useful than it used to be for financial analysis, but it's still information worth having, especially considering the fact that they already do offer quarterly information on digital distribution.

This is just a smokescreen designed to convince people that all is well. It took a while for the recession to reach the gaming industry. Now that recovery has started, it'll take a while for that to reach gaming, too. Of course they can't admit that. Their job is to convince their investors that their company is kicking ass and taking names, whether that's actually happening or not.

ReturnPostage:

Femaref:

TheDoomPenguin:
I don't think EA and Activision are saying ONLY digital sales should count. Retail and Digital sales are both large parts of the industry, especially on PC, so ignoring either is stupid. Both should be accounted for.

Exactly that's what they are saying. While there is a quarterly report on digital sales, EA/Activision don't think it is enough anymore as the digital market is steadily growing and not to be underestimated as it can skew the data severely.

sidenote: the abbreviation "NPD" is used for a german neonazi party as well. confusion...

It's also a personality disorder.

I've always wondered what it stood for. When I think of NP and videogames, I think of Nintendo Power, but somehow I don't think NPD is related to Nintendo.

OT: It would be nice to see an agency put out more regular reports on digital distribution, looking at all of the major outlets, including smaller but still relevant services like Impulse, Direct 2 Drive, and Gamer's Gate. It would finally put the question of whether PC gaming is dying or not to rest -- how many times has the discussion come up, and things looked really bad for the PC, until somebody pointed out that DD isn't included in the data they're looking at, which makes the whole thing an exercise in futility?

I can't believe I'm saying this, but I agree with EA and Activision here.

I really hate this industry's tendency to act like a fucking child whenever bad news comes out. How many times in the last year did someone in the industry flip out because a reporter told them something they did not want to hear.

Epic Mickey Sucks: "Well that's because you do not understand the controls."

Starcraft II in unfinished because you can only play Terrans in single player: "Well, the game is complete in multiplayer and you can play them."

CoD, MoH and Halo are the same games released last year: "Maybe our fans want familiarity in their gaming experiences."

Hell, I give Square a lot more credit than most. At least they were willing to admit that they released a buggy unplayable game in Final Fantasy 14 with too much bullshit.

vansau:
EA & Activision Dismiss NPD Data

Unsurprisingly, Michael Pachter weighed in on the issue, saying it was a "gross overstatement" to totally dismiss NPD's information because physical sales are still a huge part of the industry: "EA saying physical game sales don't matter is like Best Buy saying television sales don't matter."

He's right, because my downloadable TV has never been as good as the one I bought off the shelf. My downloadable record player though...

But how you get this numbers?! Sleeping with Gabe Newell?

Translation: "LA LA LA LA CAN'T HEAR YOU!"

ReturnPostage:
I'd like to see Best Buy stay in business only selling televisions.

Retail stores would rather not sell software and video games because it often costs them money instead of gaining profit. The only reason they sell them in the first place is because it brings in potential customers. They make a huge profit off TVs and gaming accessories. 25-50% of the price is mark up

Nurb:
Translation: "LA LA LA LA CAN'T HEAR YOU!"

ReturnPostage:
I'd like to see Best Buy stay in business only selling televisions.

Retail stores would rather not sell software and video games because it often costs them money instead of gaining profit. The only reason they sell them in the first place is because it brings in potential customers. They make a huge profit off TVs and gaming accessories. 25-50% of the price is mark up

Read the article again. You really aren't picking up what I'm laying down.

vansau:

In this case, it's hard not to agree with the publishers. Digital sales (not to mention online subscriptions for games like World of Warcraft) are certainly a major part of today's videogame marketplace. Case in point: Electronic Arts' digital sales reported that it expects its yearly digital revenues to climb to a to a total of $750 million by March 31st. From the sound of things, it seems like NPD is going to have to change its reporting methods if it wants to continue being taken seriously.

Or, and I'm just spitballin' here, we could take it as it has been advertised: Retail.

Nielsen's TV ratings haven't become irrelevant due to DVD sales or iTunes. Nor has their measurement of CD/"record" sales. They have expanded, but Nielsen hardly has felt the need to integrate such things directly into their TV ratings index.

Don't take me as defending NPD. They have problems, including exclusions that could potentially skew results within retail. But it's kind of silly to point out that they're not counting digital downloads in reports with no DD context.

And since they've been tracking online data for 2-3 years now, it might be a little pointless to say they have to get with the times.

Owyn_Merrilin:
I've always wondered what it stood for. When I think of NP and videogames, I think of Nintendo Power, but somehow I don't think NPD is related to Nintendo.

National Purchase Diary is the original name. Far as I know, it's now just "NPD" Because the original term is no longer contemporary.

Kind of like when Kentucky Fried Chicken tried to disassociate itself from the word "fried" and went to KFC instead.

Holy shit the devil and his son got something right for a change.

I remember when they said Black ops out sold Warcraft, star craft, and everything else.

They aren't irrelevant, they simply aren't all inclusive. The only thing left to track them if no one listens to NPD, is for them to report their own sales. It's still a very useful number for interested parties, even if it's not completely. It's like Gross Domestic Product (GDP), it's lousy to determine the actual state of economics in a place, but it has it's actual uses still.

Long story short, an 8% drop in sales could have stock consequences, so they want to report their own sales to everyone so they can make their stock look more attractive.

Edit: It exists as an outside party to track statistics. The companies have every reason to skew sales in their favor. NPD, as an independent third party, only has in interest in putting out accurate reports. Who do you think you can trust?

Awful lot of analogies going on between the publishers and the NPD rep. That's like saying analogies are the only way these people can communicate!

... sorry.

On topic, I don't really have any information on this event, since I don't follow corporate sales reports. I think everyone should say what they mean instead of needing similes and analogies to do their jobs for them.

Speaking strictly as a gamer, I've never put too much weight on NPD. If I like a game, sales figures probably little do with it. SaGa Frontier was a financial flop and didn't even sell a million copies. But I still love this little unappreciated gem of a game.

It seems silly to me to publish one set of numbers on a monthly basis and the other on a quarterly basis. If you really want to do this then the monthly numbers should either be released as raw data (with analysis kept to the more thoroughly quarterly reports) or they should make sure that they keep any conclusions they draw firmly within the context of the data. To suggest that sales are slipping when you are ignoring and important segment of the sales doesn't make sense, instead say that the sales of physical games are slipping and perhaps add that information on digital sales will be available in April (or whenever).

RT-Medic-with-shotgun:
Holy shit the devil and his son got something right for a change.

I remember when they said Black ops out sold Warcraft, star craft, and everything else.

Who is the devil and who is the son? O_o. Is the son the lesser evil. . . Or the risktaking of the two. Or is it the youngest?

OT: Digital sales change a lot from month to month aswell. A quarter is not nearly enough to account for the changes, and if they only take retail sales its gonna be misleading and can be incorrect.

The real problem with the NPD is that it only covers North America (I think). That's missing a HUGE market.

Zachary Amaranth:

vansau:

In this case, it's hard not to agree with the publishers. Digital sales (not to mention online subscriptions for games like World of Warcraft) are certainly a major part of today's videogame marketplace. Case in point: Electronic Arts' digital sales reported that it expects its yearly digital revenues to climb to a to a total of $750 million by March 31st. From the sound of things, it seems like NPD is going to have to change its reporting methods if it wants to continue being taken seriously.

Or, and I'm just spitballin' here, we could take it as it has been advertised: Retail.

Nielsen's TV ratings haven't become irrelevant due to DVD sales or iTunes. Nor has their measurement of CD/"record" sales. They have expanded, but Nielsen hardly has felt the need to integrate such things directly into their TV ratings index.

Don't take me as defending NPD. They have problems, including exclusions that could potentially skew results within retail. But it's kind of silly to point out that they're not counting digital downloads in reports with no DD context.

And since they've been tracking online data for 2-3 years now, it might be a little pointless to say they have to get with the times.

Nielsen actually adapted to the change in technology by also including dvr in their ratings reports for tv. This is what npd should be doing as otherwise it's not a complete picture and ultimately worthless.

what is it so hard for the NPD to just make the digital portion monthly as well instead of quarterly? o.O

They just need to charge more money for the reports :P its not like the companies that get them can't afford a mild price hike.

Nikolaz72:

RT-Medic-with-shotgun:
Holy shit the devil and his son got something right for a change.

I remember when they said Black ops out sold Warcraft, star craft, and everything else.

Who is the devil and who is the son? O_o. Is the son the lesser evil. . . Or the risktaking of the two. Or is it the youngest?

OT: Digital sales change a lot from month to month aswell. A quarter is not nearly enough to account for the changes, and if they only take retail sales its gonna be misleading and can be incorrect.

No idea. But father like son they are both as evil.

Anyway NPD is missing loads of data.

TheGuy(wantstobe):

Nielsen actually adapted to the change in technology by also including dvr in their ratings reports for tv. This is what npd should be doing as otherwise it's not a complete picture and ultimately worthless.

It's not analogous. iTunes is equivalent to digital sales and video, not DVR. At best, you could argue a similarlity to adding e-tailers, which NPD has done.

Nor is it completely worthless, because retail figures are there for retail purposes. I know most people use NPD as material for fanboy "size" fights and the like, but there is actually quite a bit of use in tracking retail sales.

You know, for the people the NPD numbers are intended for.

In the end, it's all silly. "It's unfair you print the numbers we use as context to both measure success and justify terminations in a fashion that may not currently benefit us!"

It also has the problem that it alters the way things are reported and relies more on self-reporting. But let's deal with one issue at a time.

"Using NPD data for video game sales is like measuring music sales and ignoring something called iTunes," said EA's Tiffany Steckler. "We see NPD's data as a misrepresentation of the entire industry."

This is just gold. I love the fallacy of comparing video games to music, as if the two are even remotely comparable.

What Miss Steckler here seems to be missing (or, more likely, is intentionally hiding) is that, unlike the music industry, the video game industry makes the lion's share of its profits through retail. So if retail sales are down, chances are that digital sales are not going to be able to compensate for that negative trend.

If these figures were positive, EA and Activision wouldn't be complaining. The fact that they are means that they are just trying to conceal the fact that the industry is not doing well.

Tom Phoenix:

"Using NPD data for video game sales is like measuring music sales and ignoring something called iTunes," said EA's Tiffany Steckler. "We see NPD's data as a misrepresentation of the entire industry."

This is just gold. I love the fallacy of comparing video games to music, as if the two are even remotely comparable.

What Miss Steckler here seems to be missing (or, more likely, is intentionally hiding) is that, unlike the music industry, the video game industry makes the lion's share of its profits through retail. So if retail sales are down, chances are that digital sales are not going to be able to compensate for that negative trend.

If these figures were positive, EA and Activision wouldn't be complaining. The fact that they are means that they are just trying to conceal the fact that the industry is not doing well.

And I loathe the fallacy that videogames are somehow completely different from music and movies for -- well, no reason really. The higher cost compared to music doesn't somehow make it a completely different class of product, nor does the lack of additional revenue sources like theatrical releases or live concerts make them incomparable. Afterall, the Honda Civic is just as much a car as the Lambourgini Murcielago, despite the ridiculous cost gap between the two, and a coupe is still just as much a car as a sedan is, despite the fact that the coupe lacks the potential revenue source of being sold to a taxi company.

Edit: Also, you have a very console centric view point. DD is at least as big as retail with PC games.

ReturnPostage:

Femaref:
sidenote: the abbreviation "NPD" is used for a german neonazi party as well. confusion...

It's also a personality disorder.

So is working for EA.
image

The_root_of_all_evil:

vansau:
Electronic Arts and Activision have stated that NPD's reports are misleading and "potentially irrelevant."

Pot. Kettle. Ethnic.

Some prefer being called Appliance-Americans.

Dear Mike Thompson,

If you want to be a better writer, explain the subject of your article before you expound upon it. It's not that I can't Google whatever NPD is, but it's just common courtesy for a writer to explain the subject of an article in the outset of said article. Assuming every reader will be a subject matter expert already is a bit presumptuous.

Regards,
~ Me

 

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