Video Game Sales Took Another Hit in July, Report Says

Long touted as one of the most recession-proof markets, the video game industry is currently feeling the continued effects of the economic downturn. Market research company NPD Group issued a depressing report in July concerning steep June video game sales declines, then announced that sales dropped even more dramatically in July, falling below even the pessimistic estimates of industry analysts.

The NPD Group said video games sales in July followed a now five-month long decline in industry figures, with sales falling 24 percent from the same period in 2008, to $848.8 million. NPD analyst Anita Frazier cautioned in a statement that although year-to-date results are weak, there are some major titles set for release over the next several months, including the popular NFL football title "Madden" in August, which are likely to give the industry a much-needed boost in sales.

NPD also said sales of gaming systems and consoles fell to $280.9 million, representing a 37 percent drop from the same period last year. Wedbush Morgan Securities analyst Michael Pachter told the AP the numbers were worse than he had predicted, though he too felt the industry was poised for a turnaround—if the console makers can entice consumers. "We need hardware to turn around or the industry is going to be in trouble," Pachter told the news agency.

While the numbers were dismal, Nintendo once again managed to stay on top of the competition: The gaming company's handheld DS player, which retails for around $130, sold 538,900 units. Nintendo's popular console system, the motion control-based Wii, was the second-best-selling gaming device in July, racking up 252,500 sales. The Wii led sales in June, moving 362,000 units and holding onto its spot as the best-selling console for the 21^st (now 22^nd) consecutive month. The third best-selling device was Microsoft's Xbox 360, which sold 202,900 units, down from 240,600 in June. Sony's pricey PlayStation 3 console/Blu-ray player saw sales decline steeply to 121,800 units, down from 164,700 units in June.

Software sales also dropped sharply to $437 million, a 26 percent drop compared with the same period last year. Once again, Nintendo led software sales with its "Wii Sports Resort" title and bookending the top five best-selling games with "Mario Kart," originally released in April 2008. Frazier suggested that several titles, including a Beatles version of the popular music game "Rock Band" and a new chapter in Microsoft's "Halo" saga, should result in a more stable industry ecosystem.

As noted, NPD Group had reported a steep drop in hardware and software sales in the month of June, the worst year-over-year monthly decline since September 2000. According to NPD Group, video game software and hardware sales in the United States plunged $1.17 billion, or 31 percent, in June. Hardware sales fell 38 percent to $382.6 million, while software sales dropped 29 percent to $625.8 million. Video game accessory sales also declined by 22 percent in June.