Interview: NPD's Klotz Explains Top 10 Sales Pressure
"Basically, Pareto's Principle indicates that roughly eighty-percent of the effects of something comes from twenty-percent of the causes," explains NPD analyst Michael Klotz to Gamasutra in an exclusive interview examining U.S. game retail trends.
Following December 2008's NPD results
, he discussed a key trend that's changing over time: "Looking at game sales from 2000 to 2008, 29 percent of the SKUs [individual game releases by format] that were in the market accounted for 80 percent of the sales."
"Looking forward to year-to-date 2008, it's actually down to 20 percent," continues Klotz. "Another way of looking at this is by examining the top 20 SKUs per year."
According to NPD data, in 2005, the top 20 SKUs accounted for 11 percent of the total unit sales. In 2008, the top 20 SKUs accounted for 18 percent of the total unit sales, NPD has found.
"You're really seeing that those top hits are the most important thing in the industry. And getting into that top-tier release is more important than ever before."
When Klotz looks at platform-by-platform, the Wii numbers are most significant. "13 percent of the SKUs that were released on the Wii account for 80 percent of the sales." The other platforms, he says, are closer to the 80/20 principle.
And in 2008, Wii produced some especially stunning numbers, according to Klotz: "When you're looking at the Wii, what's really interesting is, when you look at 2008, the top ten SKUs accounted for 44 percent of the sales. There were 432 titles available in the market for the Wii... strictly retail."
"You're looking at 422 titles that are competing for the remaining 56 percent of the sales," Klotz tells Gamasutra. He compares that to the PS2, PS3, and Xbox 360, where the top ten games only account for 31 percent to 32 percent of the sales.
"Those top ten games are such a huge piece of the Wii business," says Klotz. "And if you look at the top ten titles for the Wii, it's Mario Kart, Wii Fit, Wii Play
"It speaks to the amazing job Nintendo does, producing games for their own platforms," concludes Klotz.
The highly hit-driven business is tough for developers, Klotz tells Gamasutra, concluding: "There aren't as many games that are selling a lot of units... To become one of those industry-driving titles is becoming tougher. Especially on the Wii."