North American PC Software Sales Reach $1.48 Billion in First Quarter 1994

Home Education Sales Lead Growth--up 128%

August 8, 1994 (Washington, DC) - The Software Publishers Association (SPA)
announced today that sales of personal computer application software in
North America reached $1.48 billion in the first quarter of 1994, an 11.1%
increase from the first quarter of 1993. Total international sales
increased 19.0%, while combined North American and international sales
increased by 14.5%. Unit sales in North America increased a very strong
67%.

Windows Applications Lead; Macintosh Applications Bounce-Back

Sales of Windows applications increased 43.4% for the quarter, reaching
$899 million. DOS applications were the next largest, with sales of $303
million, but recorded a 36.4% decline from the year-ago quarter. A total
of $259 million of Macintosh applications were sold in the quarter, a
18.9% increase from the year-ago period. The Macintosh sales increase was
the best recorded since 3Q '92, and was nearly twice the 9% growth
recorded for all of 1993.

Spreadsheets and word processors were once again the largest categories,
with sales of $225.6 million (up 23.6%) and $216.8 million (up 5.9%),
respectively. With sales of $48.9 million, database sales were down 65.8%
from a very strong, product launch period in 1993.

Home Applications Growth Leaders

Although the business/productivity categories were the largest categories,
home categories were once again the sales growth leaders. Home education
software sales were up 128% for the period to $89.7 million, while
entertainment software sales rose 36.1% to $81.3 million, and finance rose
12.1% to $137 million.

"We are seeing a 'new gold rush' in the consumer software industry," said
David Tremblay, SPA's Research Director. "The rapid growth in the use of
personal computers in American homes is creating millions of new customers
for software. The industry is responding with new products, promotions,
and new distribution options, and the sales results in the entertainment
and home education categories speak for themselves - sales in these two
categories nearly doubled between 1993 and 1994 to $171 million."

SPA Introduces Two New Categories, Revises Projection Methodology

The SPA has added two new categories to the sales report detail, starting
this quarter. The two categories, project management software and personal
information management (PIM) software, had previously been reported in the
"Other Productivity" category.

In addition to the new categories, the SPA has made some changes to its
sales projection methodology. "We periodically review our projection
methodology," said Research Director Tremblay, "and make changes so that
our figures better reflect the North American market. Our last review led
to changes in 1Q 1992. With the 1Q '94 data, we've given our methodology a
'tune-up' to reflect changes in our data program and in software
distribution channels. The changes will affect our 1994 figures and will
also lead us to recompute our figures for 1993." For more information on
the changes, see the first attachment to this release.

The Software Publishers Association is the principal trade association of
the PC software industry. Its 1,100 members represent the leading
publishers in the business, consumer, and education markets. The SPA has
offices in Washington, DC, and Paris, France. SPA press releases are
available on-line through CompuServe (GO:SPAFORUM).

Software Publishers Association
1730 M St, Northwest, Suite 700, Washington, D.C. 20036
202-452-1600,  Fax: 202-223-8756
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Attachment 1: Overview of Changes to the SPA Quarterly Sales Reports

Since the SPA's last revision to its projection methodology in 1992, a
number of changes have occurred in the marketplace that have prompted to
SPA to revise its methodology in 1Q '94:

* Changes in the SPA's core data programs, including separate
  reporting of several new categories.
* Strong interest by members, press and other users in receiving
  sales data for more categories.
* A decline in channel mark-up, lowering the ratio of street
  prices to publisher revenues.

Starting with the First Quarter 1994 sales report, the SPA is now reporting
North American retail sales estimates for these software application
categories:

* Entertainment - All types of personal computer based games.
  Excludes cartridge video games.
* Home Education - Including all education products whose primary
  target is the home market and reference software.
* Finance - Personal finance, tax and accounting packages.
* Word Processors.
* Spreadsheets.
* Databases - Relational and flat-file personal computer based
  databases.
* Integrated - Includes products that combine several different
  applications in one. Includes "Works" products, but excludes
  product suites.
* Utilities - Includes products designed to enhance or improve
  operating systems, such as anti-virus, file recovery and
  back-up packages.
* Presentation Graphics - Includes software designed to create
  professional presentations.
* Drawing & Painting - Includes software whose primary function
  is to create professional freehand artwork.
* Desktop Publishing - Includes all document/page layout and
  design programs.
* Other Graphics - Includes all other graphics applications, such
  as forms packages, clip art, video and sound collections, and
  home-oriented graphics software.
* Languages & Tools - Includes all C, APL, Pascal and other
  languages as well as all tools designed to aid software
  development.
* Project Management
* Personal Information Managers (PIMs) - Includes all PIM
  packages which have integrated scheduling, note-taking and
  contact management functions.
* Other Productivity - All other types of personal computer
  software not included in the above categories, including
  electronic mail packages, school curricular software, CAD,
  scientific and engineering software, training software, and
  communications packages.

The data behind the SPA projections remains the same--the well known and
respected SPA sales reporting program, under which SPA member publishers
report their sales. What is changing the projection methodology - changing
to better reflect distribution patterns and application mixes found in the
marketplace today.
-----------------------------------------------------------------
SPA SOFTWARE SALES REPORT

Estimated North American Microcomputer Software Sales
(Measured at Retail in Millions)


                 PC/MS-DOS   Windows**   Mac**   Other     Total*
                 ---------   -------   -------   ------    ------
Entertainment      $ 39.0    $ 29.3    $ 12.9    $ ***     $ 81.3
Home Education       21.0      56.6      11.5      ***       89.7
Finance              58.1      60.3      18.6      ***      137.0
Word Processors      28.4     166.5      18.0      3.9      216.8
Spreadsheets         19.0     191.2      12.7      2.7      225.6
Databases             6.0      26.9      15.9      ***       48.9
Integrated            3.1      13.8       7.7      ***       24.6
Utilities            30.5      21.4      11.4      1.2       64.4
Presentation
    Graphics          3.1      57.6      12.0      ***       73.0
Drawing & Painting    ***      26.8      43.9      2.2       73.1
Desktop Publishing    ***      26.2      17.0      ***       43.4
Other Graphics        9.8      35.9      16.4      ***       62.6
Project Management    8.9      36.0       6.7      ***       51.6
PIMs                  1.8      32.7       6.0      ***       40.5
Languages & Tools     5.1      25.0       4.4      ***       35.3
Other Productivity   68.7      92.8      43.4      6.2      211.1

TOTAL*             $302.7    $898.9    $258.8    $18.7   $1,479.1


  * Totals may be affected by rounding
 ** Products for the Windows NT and Power Macintosh Operating
    Systems are shown under the Other format heading
*** Indicates a category with sales of less than $1.0 million,
    or a category in which too few firms report.

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