Video game industry sales slip, but remain strong

Heavy demand for Xbox 360 units, games, and accessories lead the way for the third best-selling May for the industry overall, according to The NPD Group.

Led by hot demand for the Xbox 360, the video game industry scored its third best-selling May, trailing only 2009 and 2008. Revenue was down compared with a year ago due to lower console prices, according to the latest figures released Thursday by The NPD Group.

For the month, total revenue from gaming consoles, hardware, and software slipped 5 percent to $823.5 million, compared with $865.7 million a year ago. Video game hardware took the hardest hit, dropping 20 percent to $241.5 million from $303 million a year ago. Though sales were strong, lower hardware prices added up to less revenue for the industry.

Microsoft sold 194,600 Xbox consoles, up 11 percent from 175,000 in the same period last year. Nintendo customers took home 334,800 Wii units, up 16 percent from 289,500 a year ago. And Sony sold 154,500 units of its PlayStation 3, an 18 percent gain from 131,000 in May 2009.

Though Microsoft was the leader across the board, Sony also racked up some winning results.

"The 360 platform, across hardware, software, and accessories, contributed the greatest share of revenue to industry sales for the month, and year-to-date," said NPD analyst Anita Frazier in a statement, but added, "The PS3 platform has enjoyed the greatest percentage growth, with platform sales across hardware, software, and accessories up 32% for the month, and 28% year-to-date."

Portable game consoles didn't do as well. Nintendo sold 383,700 DS units, a 40 percent drop from last year's 633,500, while Sony customers picked up 59,400 portable PSP devices, a 41 percent decline from the 100,400 sold in May 2009. NPD noted that the portable hardware category contributed the most to the decline in hardware sales for the month.

Video game titles etched out a solid month. The industry sold $466.3 million of software, a 4 percent rise from $450.4 million in May 2009. The best-selling title was the Western shoot-'em-up Red Dead Redemption , which flew off the shelves to the tune of 1.5 million units, according to NPD. In the game's first month alone, it surpassed the lifetime sales of its predecessor, Red Dead Revolver, which hit the market in May 2004.

Other new games released in May, including Super Mario Galaxy 2 , UFC 2010: Undisputed, Alan Wake , Pokemon SoulSilver Version, and Skate 3, also provided a big shot in the arm to the industry.

"In May, 8 of the top 10 SKU's for the month were new releases, which was the case with March 2010 as well," Frazier said. "When more of the top selling games are new releases, it pushes up the average selling price for software overall, positively contributing to total revenues."

 

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