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Video Game and Nintendo Switch Sales Remain Red-Hot

Spending on a wide variety of gaming products and content appears to have risen strongly again in July.
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Consumers are continuing to spend heavily on video games, judging by research firm NPD’s July numbers.

NPD estimates U.S. spending on “video game content” -- defined as covering spending on game purchases, downloadable content and game subscription services -- rose 34% annually in July to $3.25 billion. On a year-to-date basis, spending is now up 21% to $23 billion.

Spending on video game accessories -- a positive for companies such as Logitech  (LOGI) - Get Logitech International S.A. Report and Turtle Beach  (HEAR) - Get Turtle Beach Corporation Report -- is also estimated to have grown 34%, reaching $170 million. Year-to-date accessory spending is now up 24% to $1.3 billion.

With Microsoft  (MSFT) - Get Microsoft Corporation Report and Sony  (SNE) - Get Sony Corp. Report getting set to launch next-gen consoles by the holiday season, video game hardware spending is estimated to be down 2% to $166 million. However, on a year-to-date basis, spending is still up 22% to $1.8 billion.

Not surprisingly, the Nintendo Switch, which remains out-of-stock at many retailers, was July’s best-selling game console. Last week, Nintendo  (NTDOY) - Get Nintendo Co. Ltd ADR Report reported that its Switch shipments rose 167% annually to 5.68 million, with shipments of the standard Switch totaling 3.05 million and those of the cheaper Switch Lite totaling 2.62 million.

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NPD's July U.S. video game spending estimates. Source: NPD.

NPD's July U.S. video game spending estimates. Source: NPD.

Sony’s Ghost of Tsushima, a PlayStation 4 action-adventure game that’s set in ancient Japan and launched on July 17, was the best-selling video game in the U.S. in July. Activision Blizzard’s  (ATVI) - Get Activision Blizzard Inc Report Call of Duty: Modern Warfare finished second, and was followed by Nintendo’s Paper Mario: The Origami King, Sony’s The Last of Us: Part II and Nintendo’s Animal Crossing: New Horizons.

Year-to-date, Call of Duty: Modern Warfare is still the best-selling title in the U.S.. However, notably, Ghost of Tsushima is ranked No. 5 even though NPD only recorded its first two weeks of sales.

NPD’s July numbers follow a series of very strong June quarter earnings reports from game publishers, as COVID-19 continues boosting a wide variety of gaming activity.

Activision’s net bookings rose 72% annually in calendar Q2 to $2.08 billion. Electronic Arts’  (EA) - Get Electronic Arts Inc. Report net bookings rose 78% to $1.39 billion, Zynga’s  (ZNGA) - Get Zynga Inc. Report bookings rose 38% to $518 million and Take-Two Interactive’s  (TTWO) - Get Take-Two Interactive Software Inc. Report net bookings grew a whopping 136% to $996.2 million.

Nvidia  (NVDA) - Get NVIDIA Corporation Report, the top player in the PC gaming GPU market and also the Nintendo Switch’s processor supplier, delivers its July quarter report on Aug. 19.