What October’s drop in video-game sales means

U.S. video-game store sales fell 4 percent in October, largely because of a weak sales month for new hardware.

Is that good or bad? Store sales are getting harder to interpret as the industry moves away from shipping games in boxes — but they still represent seven out of 10 dollars spent on games in the U.S., even with the runaway growth of digital downloads and virtual-goods sales in social and multiplayer games.

In stores, game sales were up in the month, while hardware sales were down. And a lot of gamers were probably saving their dollars to buy high-profile products in November such as Microsoft’s Kinect motion-sensing system and Activision Blizzard’s big title, Call of Duty Black Ops.

Total U.S. game industry sales — including PC, handheld and console games — were $1.07 billion, down 4 percent from $1.11 billion a year ago, according to market researcher NPD Group. Video game hardware sales were $280 million, down 26 percent from $381 million. Software sales (console and handheld only) were $605 million, up 6 percent from $573 million a year a go. Accessories, driven by sales of the Sony PlayStation Move motion-sensing system, were $142 million, up 18 percent from $120 million a year ago.

Unit sales for software and accessories were essentially flat compared to last October, but, as mentioned, that doesn’t take into account additional sources of revenue such as digital downloads, used game sales, rentals, social network games, and mobile apps. Those could account for as much as 30 percent of the total spent on games, according to NPD analyst Anita Frazier.

The best-selling hardware system for the month was the Nintendo DS, and the Xbox 360 was the only game system to see a unit sales improvement compared to a year earlier. But as of last month, NPD stopped providing hardware unit sales numbers in its press releases.

Microsoft disclosed that its Xbox 360 unit sales were 325,000, up 30 percent from a year ago. Frazier said she anticipates the Nintendo Wii and the DS will benefit from holiday gift-giving.

There were plenty of new game launches during October, which was a crowded month because no one wanted to compete with the Nov. 9 launch of Call of Duty Black Ops, which is the blockbuster of the season. The heavy launch schedule helped push software sales above a year ago. Still, year-to-date, the video game industry’s sales are down 8 percent versus a year ago.

The No. 1 game of the month was NBA2K11, the basketball game from Take-Two Interactive that had the luxury of being the only major basketball game on the market because Electronic Arts canceled its title.  In order, the next top-selling games were: Fallout New Vegas from Bethesda Softworks, Medal of Honor from Electronic Arts, Fable III from Microsoft, and Star Wars The Force Unleashed II from LucasArts. Halo Reach, launched in September, was the No. 6 title.