U.S. Video Game Sales Hit $43B in 2018, Eclipsing Record Year at the Box Office

Black Ops 4_Red Dead Redemption 2_Split - Publicity - H 2018
Courtesy of Activision; Courtesy of Rockstar

Software sales — which posted an 18 percent growth in revenue year-over-year, up from for $35.8 billion — were fueled by megahits such as Rockstar's 'Red Dead Redemption 2' (the year's top-selling game in the U.S.), 'Call of Duty: Black Ops 4,' 'Marvel's Spider-Man,' 'God of War' and Nintendo's 'Super Smash Bros. Ultimate.'

Video game revenue reached a new high in the U.S. last year, soaring to $43.4 billion, according to the Entertainment Software Association (ESA) and The NPD Group. That figure represents an 18 percent increase from 2017.

Software sales — which posted an 18 percent growth in revenue year-over-year, up from $35.8 billion — were fueled by megahits such as Rockstar's Red Dead Redemption 2 (the year's top-selling game in the U.S.), Call of Duty: Black Ops 4, Marvel's Spider-Man, God of War and Nintendo's Super Smash Bros. Ultimate.

Meanwhile, hardware sales also increased significantly from 2017 to 2018. Up 15 percent, hardware revenue (which includes peripherals such as controllers, VR headsets and plug-and-play consoles like the SNES Classic and PlayStation Classic) grossed $7.5 billion across all three major consoles, PlayStation 4, Xbox One and Nintendo Switch. 

The Nintendo Switch surpassed the PlayStation 4 as the best-selling console, both in units sold and revenue. While Super Smash Bros. Ultimate was the best-selling game in December, it was the only Nintendo-exclusive title to make it onto the top 10 list of best-sellers in 2018. It was No. 5, according to NPD, but that figure doesn't include digital sales. Meanwhile, the console missed out on the year's two top sellers, Red Dead and Black Ops 4, which were available on PC, Xbox One and PlayStation 4. Furthermore, Sony had two exclusives in 2018 that cracked the top 10 list: Marvel's Spider-Man and God of War. The success of the titles wasn't enough to maintain Sony's position on the top of the console heap, however, as the PS4 fell to No. 2 for the first time. Still, the company announced in December that it had sold over 91 million units since the console's launch in 2013.

Nintendo's success, meanwhile, was driven by a strong holiday season and the strength of Smash Bros. Ultimate. Nintendo of America president Reggie Fils-Aime was confident of the console's success at the end of last year, telling The Hollywood Reporter in December, "We’re only in our second holiday and the consumer is indicating that, for them, this product, with this great alignment of software, really is a must-have product and something that they need to have now."

Total console sales for the Switch exceed 22 million globally, and the system has sold over 8.7 million units in the U.S. alone, making it the fastest-selling console in the current generation.

The gaming industry's 2018 total revenue eclipsed the record North American box office last year. Ticket sales for the year hit $11.9 billion, compared to the previous $11.4 billion record set in 2016. Meanwhile, music industry revenue in the U.S. for the first half of 2018 came in at $4.6 billion, according to an RIAA report in September, suggesting that when total year-end numbers are released, they will fall well short of the gaming industry's total.

The latest figures show that gaming is the top money-driving entertainment industry in the U.S., as well as globally. According to a report last week by Nielsen's SuperData Research division, global digital revenue (which doesn't include sales from consoles or physical copies of games) reached $109.8 billion in 2018 (up 11 percent year-over-year). That number was driven largely by the success of Epic Games' Fortnite, which alone made $2.4 billion last year and solidified itself as a cultural phenomenon worldwide.