NPD acknowledges 'confusion' during industry's 'unprecedented transformation'

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NPD acknowledges 'confusion' during industry's 'unprecedented transformation'
The NPD has taken several hits, mostly during investment calls and meetings we've attended over the past year, about its lack of digital distribution sales reporting. This week's quote from EA that the company's data is a "misrepresentation of the entire industry" really pushed the conversation into the public.

In response, the NPD reiterated its plans to include monthly digital sales data in its reporting to clients, something the company originally said it was working on in October 2010.

"We continue to progress those plans but at this time we're not changing anything with regard to what we're reporting," NPD analyst Anita Frazier explained to us today. "Until we have something new to announce in terms of our reporting, we will continue to report on new physical retail sales on a monthly basis. This represents about 60-70 percent of the consumer spend on the industry. Quarterly we will release a total for our estimate on the consumer spend on content outside of traditional retail and that includes used game sales, full game and add-on content digital downloads, subscriptions, rentals, mobile apps and social network gaming."

Frazier expressed that its reporting does not include revenues generated by advertising or promotional offers, but the goal is for NPD to have a comprehensive report for its clients that will cover "consumer spend" on a monthly basis.

The NPD's timetable for the first issue of its monthly digital report is not being announced publicly. The company is also determining what the publicly available report will look like. Frazier says NPD's "primary concern" is getting the clients what they need and once that's established it will decide what information will be made public.

"Non-physical sales represent the 'wild west' to the industry and it's going to take time for those involved in that space, particularly the bigger players, to get their arms around what a digital point of sale service would look like. But as digital grows, the need in the industry for insight and transparency into the larger picture will only make that need more urgent."

Asked about comments we've heard from publishers and the ESA about the need for better reporting from the NPD, we were curious if the company felt this was a breakdown of communication between the company and its partners?

"I think the industry is going through a period of unprecedented transformation and with any transformation of this magnitude, there is bound to be confusion and misunderstanding. We are making a lot of effort to communicate with our partners, listen to what they're looking for in a total consumer spend service, and let them know where we're at in the process," Frazier explained, saying NPD is making headway, but that it will be focusing on grass roots outreach so that everyone is on the same page. "It's a privilege for us to get to talk through our clients' issues and brainstorm ways to help them, and the industry as a whole. Anyone out there who has questions about what we're doing absolutely should not hesitate to call us, if we don't call them first!"
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