NPD reveals 25 per cent US software market boost

The US software market appears to weathering the console transition much better than expected, with NPD sales figures for June revealing an overall growth of 25 per cent from both current and next-gen products.

Software sales were up 15 per cent, totalling US$444.4 million (354.2 million Euro), hardware sales climbing to just shy of US$300 million (239.2 million Euro) compared to US$200.7 million (160 million Euro) in the same period in 2005.

NPD attributes the positive results to a number of factors, including the launch of Nintendo's DS Lite handheld and its associated software, such as New Super Mario Bros.

THQ's Cars, based on the animated movie, sold more than double the estimated figures, shifting an incredible 646,0000 units during the month. Other strong performances were noted from Activision's animated movie license Over the Hedge, Eidos' Hitman: Blood Money and Rockstar's GTA: Liberty City Stories on PS2.

The positive upturn, which follows an unexpected double figure spike in April and a marginal decline in May, has taken market analysts by surprise.

Wedbush Morgan Securities analyst, Michael Pachter, commented: "We had expected next generation software sales - for Xbox 360, PSP and DS handheld) to total US$120 million (95.7 million Euro), so the US$158 million (126 million Euro) sales figure was much better than our forecast. In particular, sales of Xbox 360 software were much better than we expected, increasing sequentially from $47 million to $66 million in June."

Pachter does not believe that the industry's troubles are over yet though, speculating that the coming few months would see further declines in current gen, but warning that the next-generation sales would be unlikely to offset the decline until such time as the new Wii and PS3 consoles hit market.

"We do not expect next generation software sales to consistently offset the decline in current generation software sales until the fall, when a strong line-up of Xbox 360 games is anticipated and launches of the PS3 and Wii are scheduled. We expect sales to be relatively flat in July and August, with sales growth likely to return to positive territory in September," Pachter commented in a research note.