Microsoft Takes December in NPD Group Rankings

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Steve Anderson
The Video Store Guy
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Microsoft Takes December in NPD Group Rankings

The recent results of an NPD Group study about console and software sales for perhaps the biggest shopping month of the year--December--had been eagerly anticipated for some time. Not only were they to be possibly validation of some significant moves in the marketplace, but they would likewise possibly set up the next stages of the console wars as we knew them. The news, meanwhile, was about what some expected...but what would be its long term impact?

The news that was expected, of course, was that Microsoft would take the top slot in December's rankings in terms of best hardware sales in the gaming market, and indeed, it did.  While the console-specific sales numbers weren't available, the total was at $1.31 billion in December 2014. While that was a loss from the $1.37 billion realized in December 2013, that wasn't exactly a loss out of line. This was particularly the case given that the annual hardware market for 2014 represented a significant gain over 2013. 2014 brought in $5.07 billion, according to the NPD Group reports, while 2013 saw $4.24 billion total.

These numbers were especially sought after because they came in at the same time Microsoft had launched an aggressive price cutting campaign through the holiday season, one that has since terminated. But with it complete, we can now see that Microsoft got some heavy buying thanks to the change in price, and it may well prove to be a more permanent price cut, especially when one more component makes its presence known in February.

January, you see, represents the first month in which there's no Xbox One price cut. So if PlayStation 4 jumps out in front again, Microsoft will have a rather clear mandate on its hands to cut prices and keep them cut; Microsoft led sales in November and in December when the prices were cut, but if it can't lead the field in January as well, it may well have to turn back to cost-cutting in a bid to keep its numbers up.

This is good news for Microsoft, of course; leading the holiday shopping season is never really a bad thing. While Sony had a major advantage going into that two-month corridor, Microsoft clearly needed all the numbers it could get, and boy, did it get them. And even if Microsoft does engage in further cost-cutting, it may not necessarily be able to recover. After all, a lot of that shopping impetus was gone when December 26th arrived. Sure, there will be some gift card bounce to talk about, but January is typically a slow month for retailers, and said retailers may not be much in a position to make anything worth talking about happen here.

Thus, we're going to be watching January's numbers with bated breath to see if Microsoft holds its position, or loses ground. If it loses ground in January, we may well be looking at a cost-cutting to follow. If it doesn't, then another discount likely won't materialize. Only time will tell just what result these numbers have on the market, and we could be looking at a big swing in the market to come.

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