NPD releases May sales data, Crowd vs Expert compared

In the third month of trading hybrid futures to predict NPD's monthly console sales data, it appears the Crowd is continuing to outperform one of the leading Wall Street analysts. This month, the traders on the simExchange were closer on the sales of four out of five consoles. In March and April, the Crowd was more accurate on seven out of ten predictions. Once again, we compare the aggregate predictions made by everyday gamers and those of the venerable Michael Pachter of Wedbush Morgan.

US Hardware May 2007

How exactly does this work? Gamers sign up on the simExchange for a free trading account. Using virtual currency called DKP, players buy stocks and futures that under predict sales and short sell stocks and futures that over predict sales. This concept is widely known as "the Wisdom of the Crowd" and this system is known as a "prediction market."

The simExchange did not trade monthly hybrid futures for game software this month. However, NPD's Top 10 is still relevant for comparing how trading on the simExchange is forecasting lifetime, global sales of the games.

US Software Top 10 May 2007

Although data is still limited, initial predictions on the simExchange video game prediction market appear to be relatively accurate (compared with traditional predictors), and in some cases, absolutely accurate (compared with the actual result).

Predictions on the simExchange should become more accurate over time as 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).

* NPD Group sales data
** The simExchange trading data
*** GameDaily Biz, June 11, 2007