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Great News Video Game Investors: The Latest Industry Numbers Are Looking Good

By Jon Quast and Sanmeet Deo – Nov 3, 2021 at 9:38AM

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People might be getting off the couch more these days, but they're still playing games.

Despite the increasing vaccination numbers and easing coronavirus restrictions, video game sales are still holding up nicely, something that not all analysts expected. Most of the spending right now is for video game hardware, but some video game titles are also performing well, including several from game developer Electronic Arts (EA -9.26%).

In this video from Motley Fool Backstage Pass, recorded on Oct. 18, analyst Sanmeet Deo goes through the numbers with viewers. And he shows how things aren't just looking good for EA. Two other developers are performing well, too. 

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Sanmeet Deo: As you guys know, Backstage Pass we are "The Gaming Show." NPD is a, I guess you could say, it's a data-tracking company. They pull a lot of retail data, they have a lot of data for video games and mobile games and things like that, so a lot of good stuff here.

If you look at this first slide, there's a lot of stuff on here, but basically it's looking at the comparison of September 2021 video game sales to September 2020 on a month-to-day basis, on a year-to-day basis. If you look for the month-to-date of September 2021, consumer spending for the total video game sales was up 3% to $4.4 billion. A lot of that was driven by video game hardware, which you can see is 49% for the month. Year-to-date total video game sales were up 12% of $42.3 billion. Again, being driven primarily by video game hardware. But for the year-to-date, that is giving us a nice picture of last year 2020 we're thinking around this time. Vaccines... no, vaccines weren't starting to hit at this time of last year. This was like comparing to a year where gaming and everyone staying home was at its peak. This growth is positive and it's impressive. That's nice to see for any of the stocks that we might be following here in our industry.

Here's just another slide. Just taking a look at monthly consumer spending and how it's tracked over the past year. Again, 3% for the month of September 2021 versus a year ago. Here you can see September through December of 2020, it was in a higher range there of consumer spending on video games, but on a month-to-month basis it ticked down for the year, but it's still growing. That's nice to see. That green chart line graph is basically is the percent change over the year-ago period.

Here, this is pretty cool. They have a September 2021, the top 20 video games across all platforms and Madden, not surprisingly, was the top video game of the month. They repeated as the best-selling game of the month. Ranked as No. 2 best-selling game of 2021 year to date, fourth best-selling title of the 12-month period ending September 2021 and it led both on PlayStation and Xbox.

As you can see, too, there's quite a few new titles in FIFA 22, that's new because it's the upgrade that's like the New Year edition, same with the NBA. There are a couple names here that were new launches, Tales of Arise, Death Loop, Life Is Strange, those are new games that had some pretty good strength and that's what drove that monthly gain and growth in video game sales.

This is the top 20 video games across all platforms for the month and then on the next slide, I have the year-to-date top 10 video games again across all platforms. Madden is right there at number two, and you're seeing a whole bunch of others. Sony (SONY 0.10%) and Nintendo (NTDOY 0.46%) games, Minecraft is up there at eight, Assassin's Creed number 10.

Then if they go to the next slide, it's again 12 months for September 2021, this is just a trailing look. Again, some of the popular titles that we've been talking about right up there, Animal Crossing is at seven, last month it was at eight.

Just a few slides here I put together to showcase that NPD data that gives us a nice look at how video game sales are tracking, what are the leaders in the industry in terms of the games across all platforms. They also do a report that shows you all of the top games in each different platforms, like PlayStation or Nintendo all the top games across those specific platforms. So game on, Fool on. 

Sanmeet Deo has no position in any of the stocks mentioned. The Motley Fool recommends Electronic Arts and Nintendo. The Motley Fool has a disclosure policy.

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