Video game sales plunge for 4th month in a row

U.S. video game revenues fell more than analysts expected in June, thanks to a dearth of new titles during the typically slow summer months, according to market researcher NPD.

Sales of hardware, software and game peripherals fell 31 percent to $1.17 billion in June, compared to $1.7 billion a year earlier. That was the fourth month in a row where sales fell short of last year’s numbers.

In some ways, it isn’t a surprise. Last year, a lot of big titles came out in the first half of the year. This year, most big titles are coming out in the second half of the year. Consumers are pretty much delaying spending until they see a “must have” title, NPD analyst Anita Frazier said. But it’s also clear the recession is taking a toll.

“This is one of the first months where I think the impact of the economy is clearly reflected in the sales numbers,” Frazier said. “This level of decline is certainly going to cause some pain and reflection in the industry.”

Last year, the spring release of titles such as Grand Theft Auto IV, Mario Kart for the Wii, and Wii Fit created a tsunami of game sales. But no such titles emerged this year.

In June, total revenue from sales of consoles and games slipped 31% to $1.1 billion, which is the biggest single monthly decline in nine years. Analysts expected a 29% dip. (Wedbush Morgan expected a drop of 23 percent).

Console sales revenue fell 38% to $382.6 million. Microsoft trumpeted the fact that the Xbox 360 was the only video game player to increase sales during the month of June. Nintendo Wii sales fell off 45 percent, while Sony’s PlayStation 3 fell 59 percent. Activision Blizzard’s Prototype game was the top console seller. There were four Xbox 360 titles on the top 10 games list, four Wii games, and two PS 3 games.

Nintendo’s DS and DSi handheld game players sold 766,000 units, which was more than all other hardware platforms combined. Nintendo also said it sold more than 374,000 units of its Wii Motion Plus accessory, which makes the Wii controller more accurate.

It’s time to wonder if gamers are migrating to free games on the web, Facebook, iPhone or other platforms. While console game sales have been falling, the number of online game players is up 22 percent this year, according to market researcher comScore.

Frazier said, “While some of the decline in retail sales could be a migration on the part of consumers to acquiring content via digital distribution, our reports on downloads and subscriptions reveal that it’s not yet having enough impact on the console market to be an overly meaningful factor in the retail down-turn. That said, there are increasing avenues for consumers to game, including via mobile devices, and it’s clear the industry is sorting through how to manage all these opportunities while deploying resources appropriately.”