Stardock’s Brad Wardell Questions NPD Digital Sales Numbers

July 23, 2010 -

Speaking to Shacknews in response to yesterday's report from the NPD Group that digital sales of games have caught up to retail sales, Stardock CEO threw some cold water on the numbers. Conspicuously absent from NPD's rankings were Stardock's popular game portal Impulse. In his response, Stardock CEO Brad Wardell said that NPD's numbers are not rooted in reality mainly because it is based on survey data rather than actual sales numbers.

Wardell also said that, while he is a strong believer in the future of digital distribution, he can't think of one company that sells a majority of units digitally. From the Shacknews report:
"NPD's numbers on digital don't tend to have much reflection on reality. As much as I would love digital distribution to take over the world, I can't think of a single publisher (including ourselves) that sells even close to a majority of its units digitally. I am a big believer in the future of digital distribution but the numbers we typically hear from publishers is that it's about a third (which is pretty darn good, by the way).

I had my own skepticism about the NPD report as it was compiled with survey data and not actual sales figures. It is quite possible that Impulse was omitted from the list due to less awareness by consumers. In any case, it is likely that Impulse, Direct2Drive, and others are fighting over what little market share Valve does not hold with Steam."
Wardell went on to say that Impulse will not support games that use Steamworks because it has a policy of not supporting games that requires third-party software bundling. Games that uses Steamworks require the user to use the Steam client to play the game.

While Stardock owns Impulse, not all of its business is done online; the company still teams up with publishing partners to release games at retail. The company's next in-house title, Elemental: War of Magic is set for release on Impulse and at retail in August.


Comments

Re: Stardock’s Brad Wardell Questions NPD Digital Sales ...

This has been something I've seen for a while. Not the sales numbers, just that people usually love hard numbers, even if the numbers aren't accurate.

You see this a lot in management. There is too much information to process, so they like procedures that simplify perfomance into "measurable" qualities, then they boil them down to a number for each person, then boil those down to a number for each group, then boil them down further for a number for each center. "How are we doing, Smithers?" "We are at 93, sir." "Tell them to be at 95 by the end of the day or they are all fired!" The problem is that the margin of error is so large, and the system is so open to being gamed (in either direction) that the numbers mean little. Doesn't bother them. As long as they have a number, they feel they are on solid ground. You tell them the number isn't accurate, they start to feel the ground under their feet get squishy, like they are standing on Jello. If the numbers aren't accurate, then they would have to look at all kinds of information, like actual performance, talking to customers to find out if they are happy, guaging moral. They don't like that feeling, so they convince themselves that the numbers they have are accurate enough. Then they make descisions that have a deep impact on the workers based on numbers that likely have an accuracy of +/- 50%.

NPD numbers, which are the basis of a lot of press releases, are horribly inaccurate. They take the numbers that they can read, they guess the percentage that they are seeing, then multiply in order to try and represent the whole. So they don't see Impulse, but they -guess- theyhave about 20% of the market, so they inflate their number by 20% to take Impulse into account. After each of these guesses, their accuracy gets worse and worse. Likely, they figure that they will be high on some and low on others, so it comes out in the wash.

There are three kinds of lies: lies, damn lies, and statistics.

Re: Stardock’s Brad Wardell Questions NPD Digital Sales ...

"I can't think of a single publisher (including ourselves) that sells even close to a majority of its units digitally."

Valve would like a word with you.

Re: Stardock’s Brad Wardell Questions NPD Digital Sales ...

 According to Valve, 75% of their buisness still comes from retail sales.

 
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