It’s the end of the month, so you know what that means right? NPD Report Time! Oh, wait…you’re not excited? I can’t say I’m too surprised. Fanboys, die-hards and blind defenders will swear by monthly NPD reports. Companies will put their spin-machines into high gear to twist and contort figures to reach the most ridiculous conclusions all in an effort to save face. But for what? What do we gain out of the debate over estimated sales figures? What are we really talking about here? More importantly, assuming that discussion over software and console sales is really one worth having: what should we be talking about instead of what NPD is so gracious to give us every 30 days?

The NPD Group “is the leading global provider of consumer and retail market research information for a wide range of industries. We provide critical consumer behavior and point-of-sale (POS) information and industry expertise across more industries than any other market research company.” (NPD Group Homepage) That’s a bunch of corporate/marketing buzz garble for “professional number crunchers.” Obviously I’m generalizing a great deal with that last statement but I feel obligated to give them a fair citation before I engage rant speed. At the end of each month, The NPD Group releases figures with estimated domestic sales for consoles (according to them, the DS is a console) and software. As soon as these numbers hit the GAF, X-Bots engage, Sony Defense Force members mobilize and Nintendo loyalists laugh atop their gold-plated gold in a no-holds bared flame fest. It’s like celebrating the releasing of next years NFL schedule as if it were a national holiday, people can get unbelievably worked up over these numbers. We have become slaves to the anticipation of each new report, it’s almost a textbook case in classical conditioning. The end of the month no longer signals payday, instead it signals a new NPD data sheet for us to salivate over. Pavlov would be proud.

However gamers are not the only group that will find hope or despair in these monthly figures. Ironically the people more concerned but somewhat less vocal about the monthly festivus are the game developers and publishers. Granted, companies likely have more exact and detailed sales figures to justify their business decisions but just one of these NPD reports can have a serious impact on public perception. For example. Reports of a continuing decline in PlayStation 3 sales further fuel the fire of consumers demanding a price drop. that demand leads to media running with rumors and speculation of a potential price drop date in conjunction with a random event in the near future like E3 or a Triple-A title release. Anticipation of a price drop in the future hurts possible sales of the present as consumers will put off potential purchases now in the hopes of a discount in the near future. Diminishing sales opportunities in the present result in actual decreased sales for the month, eventually reported by NPD. You can see where this is going. It’s a self fulfilling prophecy. And we still don’t have a price drop for the PS3.

The thing that bothers me is that the holy NPD reports are severely lacking. For one, they are estimates. Either by choice or by limitations on data gathering, the numbers we are given are not exact. In the grand scheme of things this isn’t really that big of a deal, but I’m the kind of person that likes specifics. Yes, I’m a control freak, but I’m also Diabetic so control is a necessity. I’m not sure how much better we all would be as a gaming populous if we knew exactly how many Wiis were selling or exactly how many Wii-motes are sold with that pack-in software of lame. But the fact that the numbers are not exact removes some of the certainty of the reporting and as a result some of the legitimacy behind any argument I could make using NPD figures as data to support my assertions. I know it’s rather trivial, but that’s my opinion. Secondly, these numbers are domestic figures. Video games are a worldwide industry and the lack of reliable worldwide statistics also makes for an incomplete discussion. As a result, all of the meaningless fanboy back-and-forth is backed by incomplete evidence. I believe that’s what we in the practice call “reasonable doubt.” I know NPD does not hide the fact that their numbers are domestic only, but I have very little faith in the ability of the Sony Defense Force to remember such an important detail. I do not fault NPD with this, but it’s still a glaring omission.

So what are we talking about here? (the answer is not Practice) We’re talking about money, a lot of money actually. All of these reports boil down to how much developers, publishers and corporate fat-cats are making off of their investment. Because sales are so important, shelf space is the most prized resource for these people. Brick and mortar entities like Wal-Mart, Best Buy, and GameStop are making all the rules right now, ultimately deciding which games get to stay on the shelves and thus have a chance to sell to potential buyers. With the number of games being released each week typically being quite plentiful, the first few weeks have become all that maters in a game’s life cycle. Without a big first effort, consumer confidence can quickly disappear along with inventory. And again, low sales means low reported figures each month, means more fear and speculation and blah blah blah you get the idea. We’ve seen how ratings impact other media. Television shows live and die by Nielson Ratings (see Chuck, Terminator, Dollhouse etc). The same goes for cinema, although they have the easiest method for success/failure analysis: look at the box office numbers. It’s a cold truth, in These Troubled Times (drink!) it all comes down to the bottom line. If a game isn’t successful, by whatever standards you use for comparison, it will disappear sooner rather than later.

Taking in the fact that NPD is merely an estimation of most (not all) of the major domestic retailers, I believe there needs to be a significant upgrade to how all of these figures are calculated and ultimately reported. Considering digital distribution is playing a larger role in profit lines across the board, we need a new method for financial analysis. Actually we need a new method for analysis in general. Raw sales data does not paint the entire picture of a game’s success or failure. If you want to talk numbers, we need to start thinking outside the box. Bungie recently announced 1 billion kills in multiplayer. Infinity Ward reported over 10 million unique users on the 360 version of Call of Duty 4 that have connected to Xbox Live. As impressive as raw sales numbers are, they don’t factor in used game sales to GameStop, games auctioned off on eBay, or games traded via PlaySwitch, Goozex or any other game trading site. Valve has clearly proven that consumers are moving past physical media but we rarely hear anything about Steam’s influence on game sales. If revenue streams for these game companies has evolved, then so too must revenue reporting. Right now NPD reports are the equivalent of an analog clock in a digital world. We are using an abacus for something that requires a Quad-Core Processor. It’s time for an upgrade.

I’m not sure what kind of effort would be required to get everyone to start to look at all of these statistics in a different light. My guess is it’s somewhere between gargantuan and unfathomable. And to be clear, I have no major issue with reporting these numbers and facts as they are released. There is always interesting discussion that can come from the fact that GTA: Chinatown Wars barely made a dent in the United States or the fact that Mario Kart DS still sells…still. But there needs to be a realization that NPD is not all that maters. I realize I’m likely preaching to the choir on this one, but I don’t sense enough of an effort to change what is reported. Sure, we all have become rather bored at the monthly console sales since they tend to be the same month after month, but what if (in a perfect world) everyone got along and were willing to disclose data on everything. EVERYTHING. What if we knew exactly how many people purchased the Resident Evil 5 Multiplayer unlock key and exactly how many people are purchasing XNA games. That would help shed light on the true success stories and provide far superior numbers depicting consumer trends.

Numbers like 10 million unique users and 1 billion multiplayer kills prove longevity amongst a sea of mediocrity. Obviously these games have big sales numbers to support their existence, but I can think of at least one blockbuster release that will not stay in disc drives for as long as Halo 3 and COD4 have. I’m looking at you Mr. Bleszinksi. Gears of War 2 might have sold like gangbusters, but is anyone still playing it? Thought so.

This article has been featured on Talking About Games. Go me!

NPD Group – http://www.npd.com/index.html