Game industry suffers worst month in nearly 5 years

May represents the worst monthly sales for the video game industry since October 2006, research firm NPD reports. Still, latest figures don't include digital downloads, a growing part of the industry.

Don Reisinger
CNET contributor Don Reisinger is a technology columnist who has covered everything from HDTVs to computers to Flowbee Haircut Systems. Besides his work with CNET, Don's work has been featured in a variety of other publications including PC World and a host of Ziff-Davis publications.
Don Reisinger
3 min read

The video game industry had an exceedingly difficult May, research firm NPD reported yesterday.

During the month, total U.S. game industry sales--including consoles, portables, games, and accessories--hit $743.1 million, down 14 percent compared to May 2010. Hardware sales were down 5 percent compared to the same period last year, while software sales slid by 21 percent during the month. Those poor results sent the industry to its lowest point in years.

"Keeping in mind that these sales figures represent just the new physical portion of the market for video game hardware, software, and accessories and not the growing portion of the industry that is comprised of digital format content distribution, May 2011 was the lowest month of sales for the industry since October 2006," NPD's Anita Frazier said in a statement. "A light slate of new releases is at the heart of this month's performance."

Frazier's acknowledgement of digital sales not being included in NPD's numbers is important to the understanding of last month's game sales. In an interview with GamesIndustry.biz in March, Frazier said that by not including digital content in its monthly data, NPD is leaving out 40 percent of all industry sales. In the same interview, Frazier said that NPD is planning to bring digital sales to its monthly reports to make its data more accurate.

That lack of digital data has caused some companies to speak out against the research firm's reports. In March, EA corporate communications executive Tiffany Steckler told CNN that NPD's digital-less reports are "a misrepresentation of the entire industry."

However, hardware is not affected by digital sales. And on that front, Microsoft once again led the way, besting Sony's PlayStation 3 and Nintendo Wii. According to Microsoft, it sold 270,000 Xbox 360 units last month, up 39 percent year over year.

"2011 continues to be the year of Xbox 360, selling more consoles than any other platform 11 of the past 12 months in the United States," Microsoft said in a statement yesterday. "In the seventh year of its lifecycle, Xbox 360 is on pace to have the biggest year in its history, a feat never achieved by any console in history."

Neither Sony nor Nintendo revealed console sales figures, but Wedbush analyst Michael Pachter wrote to investors today, saying that 236,000 Wii units and 175,000 PlayStation 3 units were sold on the month. Pachter didn't divulge 3DS sales, but he did say that Nintendo sold "well below our 180,000-unit estimate."

Looking ahead, NPD believes the Wii will still lead the console market in lifetime sales, but it won't have such a big cushion any longer.

"At the current rate of growth and decline (on a year-to-date basis) for each of the respective console systems, a year from now the Wii will still enjoy the lead in install base in the U.S., although both the Xbox 360 and PS3 will close the gap," Frazier said in a statement. "Of course, new details on hardware introduction could certainly change the picture."

On the software sales side, Take 2 Interactive's L.A. Noire was the biggest seller for the month, followed by Brink and Lego Pirates of the Caribbean: The Video Game.