Software sales down 1 percent in 2009 holiday season

U.S. software retail sales declined slightly by just over 1 percent for the 2009 holiday season, according to leading market research provider, The NPD Group, which leads the industry in software market research. NPD’s Weekly Tracking Service** shows sales for the 5 week holiday period totaled $278 million dollars, a much improved showing from the 13 percent decline during the 2008 holiday season.

The operating systems category showed the strongest improvement during the holiday season, bolstered by sales of Microsoft’s Windows 7. Overall operating systems revenue jumped from $10 million in 2008 to $29 million in 2009. Education software was another strong performer, with revenues increasing by 15 percent, driven by the strong performance of Rosetta Stone and Topics Entertainment. Business software, which posted flat year-over-year holiday sales, was the highest revenue grossing retail software category, with sales of over $77 million.

"Despite a slight decline in overall sales, boxed software showed pockets of strength as publishers, especially Microsoft, invested money in holiday promotional activity,” said Stephen Baker, vice president of industry analysis at NPD. Aggressive pricing on Office 2007 and continued strong sales of boxed versions of Windows 7 added a big kick to retail software sales during the holiday. But weak results in the key utilities category, along with ongoing weakness in PC games sales proved too much for the market to overcome."