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 Report and Turtle Beach  (HEAR) - Get 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 Report and Sony  (SNE) - Get 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)  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.

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 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 Report net bookings rose 78% to $1.39 billion, Zynga’s  (ZNGA) - Get Report bookings rose 38% to $518 million and Take-Two Interactive’s  (TTWO) - Get Report net bookings grew a whopping 136% to $996.2 million.

Nvidia  (NVDA) - Get 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.