Video Game Sales Fall 5% in May

Strong software sales led by Red Dead Redemption and Super Mario Galaxy 2 couldn't keep the overall video game industry from sliding 5 percent in May compared with the same period last year.

The video game industry took another, more modest hit in May, falling 5 percent over the same period last year to $823.5 million, down from $865.7 million in May 2009, according to research firm NPD Group, which tracks the industry. However, strong sales of two video game software titles, Super Mario Galaxy 2 and Red Dead Redemption, helped balance the industry. Overall software sales saw a 4 percent boost compared with May 2009, to $466.3 million from $450.4 million.

Sales of video game accessories also saw a modest increase of 3 percent compared with May of last year, rising to $115.7 million from $112.3 million. Hardware sales saw the biggest decline in comparison to May 2009, falling 20 percent to $241.5 million from $303 million. The Nintendo Wii led overall console hardware sales with 334,800 units sold, while the company's DS system led the handheld market with 383,700 units sold, besting Sony's PlayStation Portable (PSP) which moved just 59,400 units. Microsoft's Xbox 360 moved 194,600 units, while the PlayStation 3 (PS3) placed third in the console wars with 154,500 units sold.

"Although down this month, May sales reflect the third best-selling May on record after May 2008 and May 2009. The 360 platform, across hardware, software and accessories, contributed the greatest share of revenue to industry sales for the month, and year-to-date," said NPD analyst Anita Frazier. "The PS3 platform has enjoyed the greatest percentage growth, with platform sales across hardware, software, and accessories up 32 percent for the month, and 28 percent year-to-date."

Take 2 Interactive's Red Dead Redemption title took the top two spots for software sales on the Xbox 360 and PS3 formats, respectively, selling just more than 1.5 million copies, while Nintendo's Super Mario Galaxy 2 for the Wii sold 563,000 copies. Nintendo's first-party software took four of the top then spots in software sales in May, while THQ claimed two spots with sales of UFC 2010: Undisputed for the Xbox 360 and the PS3. Frazier said another measure of the increasing importance of the digital world is reflected in the percent of sales comprised by online-capable games. "For May year-to-date, 43 percent of total software units sold were online capable, as compared to 37 percent for the same time frame last year."

She also noted NPD has started to measure consumer spending outside the physical new retail channel. In 2009 at the E3 video game convention, NPD reported that in 2009, there was an additional consumer spend in the range of $4.5 billion to $4.75 billion on games content via these other vehicles including used, rental, subscriptions and digitally-delivered content. "Our Games Acquisition Monitor and other consumer tracking services will continue to provide clients insight into these other avenues of consumer spend on games content," she said. "Moving forward, we plan to release a limited amount of this information into the public domain, either quarterly or semi-annually."