This is the fifth month the simExchange video game prediction market has traded contracts on console hardware and the second month, the simExchange has traded contracts on 10 software SKUs. Contracts are settled against the NPD Group's monthly unit sales data.

Sony's PS3 sales came in line with market expectations at 159,000 units. The simExchange market expected 168,000 units to be sold in the month of July. PSP sales were also inline, coming in at 214,000 units, the market expected 209,000 units. Both Nintendo's Wii and Microsoft's Xbox 360 surprised the market with 425,000 units and 170,000 units sold respectively. The market had only expected 353,000 units for the Wii and 137,000 units for the Xbox 360. Sales of the Nintendo DS disappointed the market, coming in at 405,000 units. The market had expected 473,000 units.

It appears the market was originally correct when it had forecast the Xbox 360 to outsell the PS3 despite the PS3's price cut. The market sold off the Xbox 360 July future from the 160,000 units range after believing the leak of the Xbox 360's upcoming price cut would deter potential buyers, which in retrospect was an overreaction.

Sales of Electronic Art's NCAA Football (Xbox 360) lead software sales, though actual sales were below the market's expectations. Activision's extension to the popular Guitar Hero franchise, Guitar Hero Encore: Rock the 80s (PS2) including Guitar Bundle, came in second with sales also below market expectations. Nintendo's Mario Strikers: Charged (Wii) also debuted below the market's expectations without even making the Top 10. Sales of Take-Two's All Pro Football 2K8 (Xbox 360) were very disappointing.

Overall, July software sales came in below the market's expectations at $419.2 million. The simExchange had expected sales about 12.8% higher, between $459 - $487 million. It appears traders were generally bullish this month, expecting 16.79% more in total units for all software SKUs tracked in July.

The following tables compare market expectations on the simExchange and actual results as reported by the NPD Group. Expectations by leading analyst Michael Pachter of Wedbush Morgan are also presented for comparison purposes.

US Hardware in July 2007

US Software in July 2007

How exactly does this work?

Gamers and developers sign up on the simExchange for a free trading account. Using virtual currency called DKP, players buy virtual futures contracts that are under-predicting sales and short sell futures that are over-predicting sales. This concept is widely known as "the Wisdom of the Crowd" and this system is known as a "prediction market."

About the predictions

Predictions on the simExchange should become more accurate over time as (1) the diversity of the pool of traders increases and as (2) more accurate players are rewarded with more virtual currency for their accuracy (thereby enabling them to form more predictions) and less accurate players lose virtual currency (thereby discounting their ability to form more predictions).

Copyright and reprinting

The simExchange, LLC retains the right to the content of this article but permits the reprinting of this article with proper credit to the simExchange. Sales data published here includes data disclosed with permission by the NPD Group exclusively for the purpose of settling futures contracts on the simExchange.

* NPD Group sales data
** The simExchange trading data
*** Games Industry, August 20, 2007

A new tutorial for the IPO process is available in the Help section. The IPO schedule at the right side of the simExchange Official Blog now displays either the Phase 1 or Phase 2 schedule depending on the trading preferences you have set.

August 22, 2007 UPDATE: Madden NFL 08 (PS3) has replaced Madden NFL 08 (Wii)

Futures contracts for forecasting NPD's September sales data will debut in a two phase IPO.

IPO Phase 1 is a 48 hour period of trading without automated market making to determine the IPO Phase 2 price. Advanced trading mode is required to place orders in IPO Phase 1.

After IPO Phase 1, the futures contracts will enter IPO Phase 2 in which the bid and ask prices will be fixed all day.

Different this month is that all futures IPOs will begin at 11:00 AM PDT. This will allow more players to place orders at the start of IPO Phase 1.

The following is the IPO Phase 1 schedule for September game futures contracts:

August 24, Friday: Microsoft's Xbox 360.

August 25, Saturday: Sony's PS3.

August 26, Sunday: Nintendo's Wii.

August 27, Monday: Nintendo's DS.

August 28, Tuesday: Sony's PSP.

August 29, Wednesday: Electronic Arts' Madden NFL 08 (Xbox 360).

August 30, Thursday: Electronic Arts' Madden NFL 08 (PS3).

August 31, Friday: Take-Two's Bioshock (Xbox 360).

September 1, Saturday: Nintendo's Brain Age 2 (DS).

September 2, Sunday: Nintendo's Metroid Prime 3 (Wii).

September 3, Monday: Sony's Lair (PS3).

September 4, Tuesday: Sony's Heavenly Sword (PS3).

September 5, Wednesday: Electronic Arts' Skate (Xbox 360).

September 6, Thursday: Microsoft's Halo 3 (Xbox 360).

September 7, Friday: Nintendo's The Legend of Zelda: Phantom Hourglass (DS).

We integrated articles into the comments feed so that it became much easier to discuss the articles and use articles in discussion. However, there was always the problem of going to the article itself to bid for the article, rather than the comment. Changing an article's summary didn't revise the article's summary in the comment feed.

All of this has been fixed. Now articles will show up in a shade of purple when they appear in the feed. Bidding on the article in the comments feed will bid on the article directly, and not a comment version of the article. Revisions to article summaries will be reflected in the discussion feeds.

Additionally, posts made by admins now appear in a shade of blue.

We are currently considering software SKUs to list as September futures contracts. The criteria for choosing SKUs are games that will likely be in the Top 10 selling games and will attract the most trading interest from the simExchange community. The September retail month runs from September 2, 2007 to October 6, 2007. The following 10 SKUs have been identified and your feedback is requested:

Madden NFL 08 (Xbox 360)
Madden NFL 08 (PS3)
Madden NFL 08 (Wii)
Bioshock (Xbox 360)
Metroid Prime 3 (Wii)
Lair (PS3)
My Sims (DS)
My Sims (Wii)
Halo 3 (Xbox 360)
The Legend of Zelda: Phantom Hourglass (DS)

Based on user demand, the sales futures and future pages now show the dates that are included in a retail month. This should now make it more apparent if a given month include four weeks or five weeks of sales. This will also help traders quickly determine how many days of sales a game will actually have in a retail month.

The reason this is necessary is because retail months are not the same as calendar months. More can be learned by checking out the past blog post June is really five weeks. More resources can be found at the National Retail Federation's FAQ of the 4-5-4 calendar.

The simExchange Research's July Preview Report is now available. This is the first report released by the simExchange Research. You can also sign up to receive future reports via email.

Due to the delay of Sony's Lair (PS3), we are replacing the game's August Futures contract with one for Microsoft's Blue Dragon (Xbox 360). Blue Dragon (Xbox 360) August 2007 will enter IPO Phase 1 tomorrow in accordance with the original schedule.

Trading of July futures contracts will freeze at 11:30 PM PDT on Wednesday, August 22. NPD will release its data for July on August 23. Settlement will occur that evening. Remember, July data tracks sales from July 8 to August 4.

IPOs for August futures will debut in IPO Phase 1 in which there are 48 hours to determine the IPO phase 2 price. Advanced trading mode is required to place orders in IPO Phase 1. After the two days has expired, the futures contracts will enter IPO phase 2 in which the bid and ask prices will be fixed all day. All starting prices are simply suggested IPO prices. All futures IPOs will begin at 12:10 AM PDT like usual.

The following is the IPO schedule for August game futures contracts:

August 1, Wednesday: Midway's Stranglehold (Xbox 360).

August 2, Thursday: Electronic Arts' Madden NFL 08 (Wii), Madden NFL 08 (PS3), and Madden NFL 08 (Xbox 360).

August 3, Friday: Sony's Lair (PS3).

August 4, Saturday: Nintendo's Brain Age 2 (DS).

August 5, Sunday: Take-Two's Bioshock (Xbox 360).

August 6, Monday: Electronic Arts' Tiger Woods PGA Tour 08 (Xbox 360) and Tiger Woods PGA Tour 08 (Wii).

August 7, Tuesday: Nintendo's Metroid Prime 3 (Wii).

August 8, Wednesday: Microsoft's Xbox 360.

August 9, Thursday: Sony's PS3.

August 10, Friday: Nintendo's Wii.

August 11, Saturday: Nintendo's Nintendo DS.

August 12, Sunday: Sony's PSP.