Video game sales defy recession, rise 10 percent in November

Video game sales defied the tough economy and rose 10 percent in the U.S. in November, according to market researcher NPD Group. Nintendo had another outstanding month, selling more Wiis than Microsoft and Sony combined.

While sales were up 18 percent in October compared to a year ago, the November numbers are strong considering there were seven fewer shopping days after Thanksgiving this year compared to a year ago. NPD believes that the industry is on a course to hit a record $22 billion sales in 2008.

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Last month, the U.S. video game industry defied economic doomsayers, the first month of the industry’s critical sales season. That strength was surprising, given the weakness of U.S. retailers in October. It fed the theory that games are at least somewhat recession resistant, because entertainment provides an escape from the real world. Surveys show that gamers view games as offering a good value — $60 per game with many hours of play time — compared to movies or other entertainment.

The strong November sales should keep the perception alive that games are an island in a sea of economic malaise. Anita Frazier, an analyst at NPD, said that the company’s consumer index shows that games are the area where consumers are least likely to cut their spending. Earlier this week, Electronic Arts gave the industry a scare because it said its sales of holiday games were not meeting its expectations and it would have to lay off more people than it previously expected. But that may just be EA’s problem.

Overall game sales were $2.91 billion in November, up 10 percent from $2.64 billion a year ago. Hardware was up 10 percent at $1.21 billion, up from $1.1 billion a year ago. Software was up 11 percent to $1.45 billion, up from $1.31 billion a year ago. Accessories were $255.4 million, up 7 percent from $238.6 million a year ago.

Nintendo sold 2.04 million Wii consoles, compared with 981,000 a year ago. The Nintendo DS sold 1.57 million DS handhelds. Microsoft sold 836,000 Xbox 360s, compared with 770,000 a year ago. Meanwhile Sony sold 378,000 PlayStation 3s, down from 466,000 a year ago Sony sold 206,000 PlayStation 2s, down from 496,000 a yaer ago. And Sony 421,000 PlayStation Portables.

Microsoft still had a big month in terms of game sales. Microsoft’s Gears of War 2 was the No. 1 game with sales of 1.6 million in the U.S. in November. Roughy 13 percent of all Xbox 360 owners bought the game. The Xbox 360 version of Activision Blizzard’s Call of Duty: World at War was No. 2. Electronic Arts’ Left For Dead on the Xbox 360 was No. 8. Nintendo had three titles in the top 10: Wii Play, Wii Fit, and Wii Music. The latter had a slow launch in October but came back nicely in November. Sony’s only top ten title was Resistance 2, which came in at No. 9.

Microsoft has 14 million active Xbox Live members online worldwide, with the average number of unique visitors rising 66% in the past year. Microsoft said more than 1.5 million transactions and nearly 4 million game sessions take place on Xbox Live each day.

Microsoft said third-party revenues were $298 million and total Xbox 360 software sales were $408 million. PC game sales were lifted by Activision Blizzard’s World of Warcraft: Wrath of the Lich King, which sold more than 1.4 million copies.

In October, sales were $1.31 billion, up 18 percent from $1.12 billion a year earlier. Year to date sales are up 25 percent. Hardware sales were $494.7 million, up 5 percent from $470.5 million a year earlier. Software was $696.8 million, up 35 percent from $514.6 million a year ago. And accessories declined 8 percent to $120.2 million from $130.8 million.

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September’s sales were down 7 percent from a year earlier. But the problem was that there were big game releases such as “Halo 3″ in September of 2007, making it hard to beat last year’s numbers.

In October, the Wii sold 803,000 units in the month, up from 687,000 units in September. Microsoft sold 371,000 Xbox 360’s and Sony sold 190,000 PlayStation 3’s. Nintendo sold 491,000 DS units (down from 537,000 units in September), while Sony sold 193,000 PlayStation Portables (also down from 238,000 units in September). The PlayStation 2 sold 136,000 in October.