EA: NPD Data 'A Misrepresentation Of The Entire Industry'

As digital markets and new platforms rapidly emerge, the U.S.'s NPD data, which tracks only retail software, hardware and accessory sales, is an ever less-thorough picture of the video game industry's health. Many investors still see physical software percentage declines as reasons to be cautious about game publishers -- and those publishers are beginning to speak out. "Using NPD data for video game sales is like measuring music sales and ignoring something called iTunes," Electronic Arts corporate communications' Tiffany Steckler tells CNN Money. "We see NPD's data as a misrepresentation of the entire industry." NPD data doesn't capture titles sold digitally over console storefronts like Xbox Live Arcade, PlayStation Network and WiiWare, nor does it track the performance of subscription-based games, downloadable games or item sales in browser-based games, Facebook games or in mobile markets, all of which are rapidly gaining marketshare within the overall game industry. EA in particular is heavily impacted by the incomplete data, as a key pillar of the publisher's current profitability strategy involves a rapid shift to digital business models alongside more traditional core retail franchises. NPD analyst Anita Frazier said her firm is taking steps towards better tracking of total industry revenues through quarterly reports that track digital sales. "This in addition to what we are best known for and that is our monthly reporting of new physical sales occurring at retail," she said. Analysts tend universally to agree that digital business models represent the highest growth opportunity for the video game industry, as Stern Agee's Arvind Bhatia notes in the report. But it's not quite a black-and-white argument, asserts Wedbush's Michael Pachter: "EA saying physical game sales don't matter is like Best Buy saying television sales don't matter," he says.