The NPD group has released its report for the final month of 2014 and the entire year. The industry saw a modest uptick of 1 percent for the full year, however the category sales paint a more complex picture.

Hardware sales increased from $4.24 billion in 2013 to $5.07 billion in 2014 (an $838 million increase, or 20 percent). Software sales fared much worse, dropping from $6.11 billion to $5.30 billion ($808 million dollars, or 13 percent). It’s important to note that since NPD only tracks retail, this does not necessarily indicate a true decline in software sales, but rather a growing transition from retail to digital.

Software sales for current generation hardware are up 70 percent, with last-gen games dropping 33 percent. Handheld software is also down, with a 16 percent drop. 2014 was a year filled with delays, which led to a significant drop in new SKUs (a 10 percent year-over-year decrease).

Earlier today, Microsoft announced that it had come out on top for the second month in a row. The company’s decision to aggressively bundle and temporarily lower the price during the holiday season to $349 paid off. After two weeks back at the regular $399 price point, Microsoft has decided to renew the promotion. Sony also bundled for the holidays, and across platforms, packaged hardware and software represented 71 percent of sales. In 2013, bundles only represented 32 percent.

Starting tomorrow, January 16, the Xbox One will be priced at $349 once more. Microsoft says this is a temporary drop, but has not specified when the offer will end.

Call of Duty: Advanced Warfare led the month of December and 2014 at retail. Destiny was the number three title at retail for the year. Not that these rankings do not include digital or bundle copies. They do, however, include all different versions of a game, including collector and game of the year editions.

  1. Call of Duty: Advanced Warfare (360, XBO, PS4, PS3, PC)
  2. Grand Theft Auto V (XBO, PS4, 360, PS3)
  3. Madden NFL 15 (360, XBO, PS4, PS3)
  4. Super Smash Bros.(NWU, 3DS)
  5. NBA 2K15 (360, XBO, PS4, PS3, PC)
  6. Minecraft (360, XBO, PS3, PS4)
  7. Far Cry 4 (PS4, XBO, 360, PS3, PC)
  8. Just Dance 2015 (Wii, 360, NWU, XBO, PS4, PS3)
  9. Destiny (XBO, 360, PS4, PS3)
  10. FIFA 15 (360, XBO, PS4, PS3, Wii, 3DS, PSV)

Here are the best selling retail games for 2014 in the United States:

  1. Call of Duty: Advanced Warfare (360, XBO, PS4, PS3, PC)
  2. Madden NFL 15 (360, PS4, XBO, PS3)
  3. Destiny (XBO, PS4, 360, PS3)
  4. Grand Theft Auto V (PS4, XBO, 360, PS3)
  5. Minecraft (360, PS3, XBO, PS4)
  6. Super Smash Bros.(3DS, NWU)
  7. NBA 2K15 (PS4, XBO, 360, PS3, PC)
  8. Watch Dogs (PS4, XBO, 360, PS3, PC, NWU)
  9. FIFA 15 (360, PS4, XBO, PS3, Wii, 3DS, PSV)
  10. Call Of Duty: Ghosts (360, PS3, XBO, PS4, NWU, PC)

Our Take
I don’t believe the Xbox One (without Kinect) will ever be priced at $399 again. With this extended period at the lower price, Microsoft will have a hard time convincing consumers that the true value is $399. I expect that price drop to become permanent in the coming months.

Please keep in mind that until NPD reports digital sales, the software numbers are going  to become harder to interpret. The trending digital adoption is clear, but having a better picture of those sales would be most helpful.

 the author Mike Futte