[NPD] September

Overall

"This is the first true monthly decline the industry has experienced since March of 2006. It's important to keep in mind, however, that this month's 7% decline is against a month (September 2007) that itself was up 75% from the prior September. Last year, Halo 3 released in September 2007 and that game had a huge impact on hardware and software sales."

"Overall, the health of the video games industry remains quite strong despite the rocky economic conditions. Tracking against typical industry seasonality, the U.S. video games industry is positioned to realize $22B or more in revenues for the year (does not include PC Games)."

Software

"A full 35% of last year's software sales came from one title: Halo 3. This year, the wealth is spread a bit more broadly as seven titles achieved sales of 250K units or more while last year only three hit that mark."

"A wide array of content found retail success from Star Wars: The Force Unleashed, to Wii Fit, to LEGO Batman. Rock Band 2 achieved sales of over 360K units on just one platform and this title should continue to make its mark on the industry when the PS3, Wii and PS2 versions are released later this year."

"Although PC games sales are not included in these numbers, there were two that should be pointed out. Spore realized sales of 406K units and Warhammer Online: Age of Reckoning sold 274K which would put them both in the top 10 list of combined console, portable and pc games sales for the month."

Hardware

"Hardware unit sales were flat versus last year so the decline in dollars is due to lower prices. The average retail price of hardware across all platforms declined 8% from last September."

"Compared to August, nearly all hardware systems realized an increase in unit sales in September. The price reduction on the Xbox 360 helped deliver a month-over-month unit sales increase for that platform of 78%. This increase, despite the acceleration of economic turmoil during the month of September, is solid indicator of the health of the industry heading into the holiday season."

Accessories

"Although down slightly in dollars, unit sales of accessory items increased slightly as compared to last year."

347,000 Xbox 360 consoles sold in September following our U.S. price cut on Sept. 5 contributing to a U.S. install base of 11.3 million (September NPD data). Xbox 360 is now the most affordable next generation console on the market—$50 less than the Wii and half the price of the PlayStation 3.

Backed by September sales data, which showed $326 million in total consumer spend in the U.S. and a record software attach rate of 8.1 (September NPD data), we know Xbox 360 owners will continue to flex their buying power in the coming weeks when blockbusters like “Gears of War 2,” “Lips,” “Fable II,” “You’re in the Movies” and “Scene It? Box Office Smash” hit shelves.

Xbox 360 is the preferred stage for this holiday’s hottest music games

New music tracks for popular games like Rock Band and Guitar Hero extend every music experience so every party feels like a new party. Xbox LIVE has delivered more than 80% of the downloadable songs for music games, currently averaging 3.8 million music downloads per month. In total, Xbox 360 users have enjoyed more than 45 million music downloads. (Microsoft internal data)

In addition to leading the online music game market, Xbox 360 sells more copies of the world’s favorite music franchises. To date this generation, in the U.S., nearly 2 million copies of the Rock Band franchise have sold on the Xbox 360, almost 1 million more than the competition combined. Life-to-date sales of the Guitar Hero franchise on Xbox 360 top 4 million, securing more than 50% of franchise sales this generation (September NPD data).

“Rock Band 2” debuts exclusively on Xbox 360

· Since its U.S. launch on Sept. 14, “Rock Band 2” on the Xbox 360 sold 363,000 copies in September, making it September’s #3 selling game.

· This holiday, Xbox 360 will continue to sell more third-party games like “Rock Band 2” than the competition. In September alone, Xbox 360 generated $167 million in third party game sales.

Calling all shower singers, wanna-be rappers and pop princesses – “Lips” hits the stage in November

· “Lips” will have music fans singing their favorite tunes this holiday season as this totally new singing IP lands around the globe. “Lips” lets people sing the music they want with breakthrough wireless motion-sensitive microphones, backed by master tracks and original music videos. “Lips” hits in mid-November, exclusively for Xbox 360 from Microsoft and iNiS.

“Guitar Hero® World Tour” drops on Oct. 26 with a cooperative band experience, newly redesigned controllers and in-game Music Studio music creator

· “Guitar Hero World Tour” launches on Oct. 26. Xbox 360 gamers worldwide have early access to an R.E.M. track pack featuring three songs from the band’s new album, and Metallica’s highly anticipated full-length album, “Death Magnetic,” was offered to music fans around the world as downloadable content on Xbox LIVE in its entirety on the same day the record was released.

At the Tokyo Game Show last week we announced that the New Xbox Experience will launch worldwide on Nov. 19. For the first time in the history of the internet, 14 million consumers across 24 countries will all tune in at the same time to watch their Xbox 360 completely reinvent itself, for free, with the New Xbox Experience.

From the best music games and blockbuster titles, to LIVE Parties, photo sharing and access to a movie and TV show library 30,000 deep through the New Xbox Experience, Xbox 360 has something for everyone this holiday.

Nintendo News

Unique Controls Put Wii at No. 1 for September NPD; Nintendo DS at No. 2

Backed by a variety of unique interfaces, Nintendo’s Wii™ console topped the U.S. video game hardware sales charts with nearly 687,000 units sold in September, according to the independent NPD Group, which tracks video game sales in the United States. Nintendo DS™ was the No. 2 best-selling system, with nearly 537,000 sold.

Wii enjoyed the biggest monthly unit sales increase with 234,000 more units sold in September than August. Wii also saw a year-over-year increase of more than 37 percent over September 2007.

Four games made for Nintendo systems placed in the top 10 best-selling games of the month, including Wii Fit™ at No. 2 with nearly 518,000 sold, Mario Kart™ Wii at No. 4 with more than 353,000 sold, Wii Play™ at No. 7 with nearly 243,000 sold and Star Wars: The Force Unleashed for Wii at No. 8 with more than 223,000 sold.

“The four Wii games in the top 10 all feature controls just not possible on other video game systems,” said Cammie Dunaway, Nintendo of America’s executive vice president of Sales & Marketing. “The Wii Balance Board and Wii Wheel give players new ways to interact with their games, while the Wii Remote controller transforms into a pool cue, table tennis paddle or lightsaber. Consumers have truly responded to this variety of entertainment options.”

PS3 Sales Setting the Stage for a Solid Holiday Season; Total PlayStation Sales Up 20 Percent Year-Over-Year
PlayStation 3 Hardware Unit Sales Top 232,408
PLAYSTATION®3 (PS3™) again experienced consistent momentum in September 2008, with 232,408 hardware units sold according to The NPD Group, an increase of over 94% year-over-year and an increase of more than 25% over the previous month. Additionally, software sales for PS3 experienced year-over-year growth of 130% with 1.72 million units sold.
Software sales are expected to continue their upward projection in October as SCEA kicks off the holiday season with the highly anticipated launches of LittleBigPlanet, SOCOM: U.S. Navy SEALs Confrontation, MotorStorm: Pacific Rift, and NBA ’09: The Inside.
PlayStation®Network remained a popular destination with newly added games and entertainment content such as WipEout HD, Linger in Shadows and PAIN: Amusement Park. There are currently more than 12 million registered accounts worldwide and over 240 million pieces of content have been downloaded worldwide.
PSP also experienced strong sales, with 238,056 hardware units sold.
Fueled by enthusiasm for the limited-edition LEGO Batman: The Videogame PlayStation®2(PS2) Pack, PS2 generated solid sales in September, with 173,527 hardware units sold, 20% growth from last month. An impressive 42.9 million PS2s have been sold in the U.S. as of September 2008.

Power of the PlayStation Portfolio
The PlayStation brand experienced strong sales across all three platforms, earning $379 million in September.
Year-to-date (Jan-Sept), the PlayStation brand has generated $4.03 billion in revenue, representing an increase of 20% year-over-year.
PlayStation total hardware revenue was $160.5 million in September, representing a year-to-year growth of 11%.
PlayStation total software revenue in September was $180 million, representing a year-to-year growth of 17%.

CEO Perspective

“We remain confident that our footing is solid as we enter the holiday season this year. Our new 80GB PS3 model has made its way to retail shelves and into consumers’ living rooms as the best value for both their gaming and entertainment needs. If the impressive pre-sale numbers and ratings for LittleBigPlanet, SOCOM: Confrontation, and Resistance 2 are any indication, we anticipate hardware and software sales to continue to lift in October as we officially kick off the broadest and deepest software line-up this holiday, including LittleBigPlanet, SOCOM: Confrontation, MotorStorm: Pacific Rift and NBA ’09: The Inside.

- Jack Tretton, president and CEO, Sony Computer Entertainment America