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Analysis: Video game spending hits record $1.5B in October, up 73% as new games drive big sales

November 26,2018 02:17

2018 has been a rocky year for the video game industry. We've seen the closure of several big studios; a growing grassroots effort toward unionization; high-profile companies accused of gender discrimination or poor labor practices; rogue elements in ...


Nintendo’s re-release of the NES Classic this summer helped boost industry hardware sales. (Nintendo Photo)2018 has been a rocky year for the video game industry. We’ve seen the closure of several big studios; a growing grassroots effort toward unionization; high-profile companies accused of gender discrimination or poor labor practices; rogue elements in various games’ fanbases acting to weaponize social media against developers they don’t like; and a few truly bizarre controversies, like scam artists sneaking cryptojacking software onto Steam.
It’s been a weird period in a weird business.
 2018 felt like the year where the console market stopped promising and started delivering.At the same time, however, 2018 has been an extraordinarily lucrative year. The latest report from NPD Group indicates the 12-month period that ended in October 2018 has seen the highest amount of consumer spending on video games since 2011. This past October in particular marked the single highest amount of spending in one month since the NPD began to track the market in 1995.
Total industry-wide video game sales in October of 2018 totaled $1.5 billion dollars, a full 73 percent higher than October 2017. Hardware sales were up 26 percent, accessories and pre-paid game card sales increased by 54 percent, and software sales, both digital and physical media, were up by a full 104 percent.
This sort of report involves a certain amount of reading tea leaves. The NPD bases its findings on participating publishers as part of a digital panel. Most companies in the industry are notoriously tight-lipped about sharing their internal data — as such, the findings of the report don’t necessarily reflect the actual totals involved, but there’s enough information here to draw some interesting conclusions.
For one thing, you can chalk some of the increase in hardware sales up to the re-release of the NES Classic, which outsold every other console in June of 2018. The low initial product run back in 2016 did a lot to build hype for the re-release. Another factor is continued brisk sales for the SNES Classic.
2018 felt like the year where the console market stopped promising and started delivering. The first couple of years in the eighth generation of consoles were rocky; the initial game libraries for both the PlayStation 4 and Xbox One mostly consisted of hasty ports, compilations, and re-releases, and the Wii U fell apart relatively quickly.
Now, however, many of the projects that have been in the works since the consoles debuted — Crackdown 3, Smash Brothers Ultimate, Monster Hunter World, God of War, and so on — have finally materialized. Nintendo has made a lot of money by turning the Switch into a platform for independent developers, while Microsoft is pivoting to games as a service and Sony is continuing to move forward with an impressive line-up of exclusive titles. This year, all the major players brought a lot to the table.
One surprise, considering the NPD’s findings on hardware sales: the consumer market for virtual reality has slowed down. It’s a big, emerging field, with a lot of mainstream and indie developers in the Pacific Northwest hard at work on new VR titles, but sales of the necessary hardware are down by a third from last year.
Battle of the titans in Q4
Rockstar Games’s Red Dead Redemption 2. (Official press kit image)We knew coming out of this year’s E3 that the fourth quarter of 2018 was going to be brutal. The holiday season has always traditionally been a knock-down, drag-’em-out battle in the marketplace, where big companies compete to dominate the quarter with major releases, but 2018’s is particularly so.
The big dog in the race was, of course, Rockstar’s open-world western Red Dead Redemption 2. Rockstar games tend to be massive hits. The original RDR has shipped well over 15 million units by now, and 2013’s Grand Theft Auto V is one of the single most successful entertainment products in human history, reaching $1 billion in sales in the first three days of its release. This was Rockstar’s first new release in five years. Even after one of its lead developers accidentally shot their marketing campaign in the foot, it took a very confident or insane competitor to want to go up against RDR2 at all.
As it turned out, that competitor was Activision’s Call of Duty: Black Ops IV, which knocked RDR2 to the No. 2 spot for sales in both October and the year to date, although it did have the advantage of coming out two weeks earlier. The newest entry into the military shooter franchise got some bad press earlier in the year for not including a single-player campaign at all (which was no great loss, since Call of Duty solo scenarios tend to play like the longest tutorial level you’ve ever seen) and for introducing a “battle royale” mode called Blackout, which struck a lot of analysts as being an attempt to piggyback off the success of games like Fortnite and PlayerUnknown’s Battlegrounds.
(Activision Photo)In the end, though, Black Ops IV turned out to be one of the most critically successful Call of Duty games in years. RDR2 will likely overtake Black Ops IV in the long run — GTAV hasn’t actually left the sales charts for five years — and is supposed to have a big multiplayer component coming soon as DLC. For now, though, Black Ops IV is at the top of the heap.
The dark horse contender this year was Ubisoft’s Assassin’s Creed: Odyssey, which was the third best-selling game this October, but has yet to crack this year’s top 10. Battlefield V, which came out Nov. 20, looks like it might’ve been doomed on arrival; the Battlefield franchise tends to lag behind Call of Duty‘s sales under the best of circumstances, and these are among the worst.
Fortunately for Battlefield, however, the enthusiast press seems to have picked a game to be this year’s big loser, and it’s Square Enix’s The Quiet Man, which is turning into a hobby-wide punchline. I’m going to end up tracking this thing down eventually because I keep being told how weird and bad it is; it’s a full-motion video game (strike one; FMV has always been dicey in video games) with a deaf protagonist, so all the in-game audio is muted and unsubtitled (cool idea, but yeah, strike two), but the sound can be reactivated as a bonus feature after you beat the game once (strike three).
Other big sellers in this year to date include Ubisoft’s Far Cry 5 (No. 3), Insomniac Games’s Spider-Man on the PS4 (No. 4, and which will be further buoyed by a number of big Black Friday sales), Sony’s fourth installment in the God of War series (No. 6), and Capcom’s Monster Hunter World (No. 7), which rapidly became the highest and fastest-selling game in its developer’s history.
Nintendo had a relatively quiet October compared to other platforms, but still had three games in the month’s top 20: Super Mario Party (No. 5), Mario Kart 8 on the Switch (No. 15), and The Legend of Zelda: Breath of the Wild (No. 19), still selling respectably 20 months after its release.
A look ahead

There are only a couple of big releases left in 2018. Super Smash Brothers Ultimate is a near-guaranteed system seller for the Nintendo Switch — it’s more or less all that Nintendo’s been talking about for the last six months. You can assume that, in keeping with the franchise’s history, everyone who owns a Switch will end up with at least one copy of Ultimate.

Fans of giant explosions should also keep an eye out for Just Cause 4 (PC/Xbox One/PlayStation 4), the latest installment in Square Enix’s notoriously insane open-world series. As in previous games, JC4 puts you in the role of freelance insurrectionist Rico Rodriguez, who’s going up against a private army called the Black Hand in order to liberate a small country in South America. As in previous games, you’re encouraged to figure out elaborate freeform ways to turn anything into an unnecessarily large bomb. The big advancements for the fourth game include the ability to attach thrusters and balloons to objects, so you can turn anything you can reach into your own personal rocket sled, and the inclusion of realistically-rendered weather patterns, up to and including rogue tornadoes.
The PlayStation Classic. (Official Sony image)The PlayStation Classic is also scheduled for release on Dec. 4, though it’s anyone’s guess at this point how well it will do. A lot of today’s big franchises got started on the original PlayStation, so any lineup chosen for the Classic would’ve been guaranteed to have at least one controversial omission. Even so, the initial 20 games on the Classic feel like they’re the result of a drunken dare. Who on Earth was clamoring for Battle Arena Tohshinden or Jumping Flash to make a triumphant comeback? Was there a fanatical fanbase for the PlayStation version of Mr. Driller and I just missed it?
Sure, it’s got Final Fantasy VII, Metal Gear Solid, and Tekken 3, and I can’t hate any device that contains a copy of Super Puzzle Fighter II Turbo (if you’ve got a Tetris fanatic in your life, consider introducing them to this game), but it doesn’t have even one Tomb Raider, there’s no Crash Bandicoot, and Gran Turismo is entirely absent. Either this is a really hasty production and Sony just grabbed whatever was easiest to get the rights for, or they’re planning to release expansion packs for this thing. Or it’s both.
2019: This time, it’s lower-key
The first quarter of 2019 tends to be quiet, as most of the video game industry takes January off to reacquaint themselves with their families and remember what sleep feels like. Even so, January through March sees a lot of releases, typically games that decided to sit out the annual holiday-season crossfire. Here’s a look at what’s coming:
Capcom’s remake of Resident Evil 2, which updates the classic 1998 horror game with modern gameplay and graphics.
Microsoft’s long-delayed Crackdown 3, which I will not believe exists until I am holding a copy in my hand.
Koei Tecmo’s fighting game Dead or Alive 6, which has become controversial in certain dark circles of the internet for actively toning down the franchise’s trademark sexualization.
Namco Bandai’s anime crossover beat-’em-up Jump Force, which unites the casts of Dragon Ball Z, One Piece, and Naruto into a single Avengers-style superhero team.
BioWare’s all-new multiplayer mech-suit game Anthem, which has a lot riding on it after the damp squib that was Mass Effect: Andromeda.
From Software’s Sekiro: Shadows Die Twice, a spiritual sequel to the long-dormant ninja stealth series Tenchu.

The biggest game of 2019, however, is currently the long-promised third entry in Square Enix’s Kingdom Hearts franchise, which will take over a substantial portion of the nerd internet right at the end of January. It’s been a long, weird 14 years since Kingdom Hearts II, marked by a few 3DS and PlayStation Portable releases, but KH3 marks the series’s return to home consoles. It’s supposed to be the third and final entry in the story that’s been building since the original Kingdom Hearts, which teams up a boy named Sora with Goofy and Donald Duck in an effort to save the connected worlds of Disney (and now Pixar) from an imminent supernatural threat.
We can also expect to start hearing details about the upcoming ninth generation of video game consoles at some point during 2019. There are already a lot of rumors floating around concerning Microsoft’s “Scarlett” project, as well as its continued attempts to focus on the services it can provide via the Xbox.
Nintendo is probably going to end up spending most of 2019 counting its Smash Brothers money, but it’s got a new Pokemon game on the horizon, as well as a third Luigi’s Mansion, a new Fire Emblem, and an exclusive fifth entry in the Shin Megami Tensei series on the Switch. (SMT in a nutshell: really difficult turn-based Japanese RPGs with a cult fanbase, which are usually about some teenager picking a fight with God. Seriously. The last boss of the second one is Yahweh. These games are nuts.)
The big question in 2019, however, is Sony. It announced a couple of weeks ago that it was skipping E3 2019. It’s got a few big games on the horizon, none of which have release dates, such as Hideo Kojima’s utterly bizarre Death Stranding, the violent post-apocalyptic stealth game The Last of Us: Part II, and the Bellevue, Wash.-developed samurai period drama Ghost of Tsushima. You can probably count on at least one of those games to come out by the end of next year — just in time for people to start talking about the PlayStation 5.

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