US video game sales sink in June, biggest drop in 9 years

Sales of video game hardware and software were down by around one-third in June compared to the same month last year, according to data released late Thursday. After initially showing positive growth as the U.S. slid into recession, the latest figures mark the fourth month of declines and the largest year-on-year decline in almost 9 years.

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"The first half of the year has been tough largely due to comparisons against a stellar first half performance last year, but still, this level of decline is certainly going to cause some pain and reflection in the industry," said Anita Frazier, a games analyst with NPD Group, in an e-mailed statement.

The entire video game market in the U.S. was worth US$1.2 billion in June, down 31 percent from the same period last year, according to NPD Group. Software accounted for more than half the market with sales of $625.8 million, down 29 percent on June last year, while game hardware sales came in at $382.6 million, down 38 percent.

Those declines mark the worst year-on-year since September 2000, when the market witnessed a 40 percent fall, and it could get worse.

"This is one of the first months where I think the impact of the economy is clearly reflected in the sales numbers," said Frazier. "While the aggregate of content may not be as strong as what we saw in the first half of last year, and while the consumer base willing to spend dollars on hardware at the current price points may be thinning, the size of the decline could also point to consumers deferring limited discretionary spending until a big event (must-have new title, hardware price cut) compels them to spend."

The top selling device of the month was the Nintendo DS which shifted 766,500 units in the month. The strong sales were spurred by the April launch of the DSi, a new version of the popular handheld gaming device.

The only other competing handheld, Sony's PlayStation Portable, sold 163,500 units. Sony has promised a new version of the PSP for later this year so many gamers will likely hold off on buying the device until the new model appears. It's due to be launched in the U.S. in October.

Among game consoles, Nintendo's Wii sold 361,700 units in the month to make it the top ranked console. Microsoft's Xbox 360 came in second with sales of 240,600 units and was followed by the PlayStation 3 at 164,700 units and the PlayStation 2 at 152,700 units.

During the month the top-ranked game was "Prototype," an action thriller in which gamers play a genetically-mutated character with shape shifting abilities. The Activision Blizzard game, which launched on June 9, is available for the Xbox 360, PlayStation 3 and PC platforms but it was the Xbox version that topped the chart with sales of 419,900 copies in the month.

Second most popular game of the month was the pro-wrestling "UFC 2009: Undisputed" title from THQ. The game launched in late May and sold more than a million copies last month for the Xbox 360 and PlayStation 3. In June the Xbox version remained in the ranking with sales of 338,300 units.

The IDG News Service is a Network World affiliate.