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Retail video game industry bounces back to life in June

After months of bad news, the sales of physical games, game hardware and game accessories surged in June amid rosier predictions for the console market.

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Batman: Arkham Knight was the best-selling game of the month, despite a disastrous launch on the PC. Warner Bros.

In the same month in which the video game industry held one of its largest conferences dedicated to upcoming titles, sales of physical games and game hardware jumped to record highs for the year.

The Electronic Entertainment Expo, the marketing extravaganza dedicated to the video game industry's biggest titles of the year was held in Los Angeles this June. Some of the biggest game makers, from Microsoft to Sony, and Electronic Arts to Ubisoft, held events to tease upcoming blockbuster titles such as the space-age shooting game "Star Wars Battlefront" and the action adventure title "Assassin's Creed: Syndicate."

The response from consumers appears to be positive as retail sales of physical games on discs and accompanying hardware saw year-over-year growth in June, according to market researcher NPD Group. Overall sales of software, hardware and game accessories in the US grew 18 percent for the month to $869.4 million.

Since the introduction of new game hardware from Microsoft and Sony in November 2013, the retail game industry has been struggling to stabilize itself as it transitions away from old hardware, released a decade ago, to new devices released in the past few years. Sales of these upgraded consoles have been strong, but software sales have fluctuated and, on the whole, have tended to fall from year-ago comparisons. That's due to a lack of enthusiasm and lack of diversity in new games, analysts say, at least those titles that are purchased from US retail outlets like GameStop and Amazon, which is the only segment NPD tracks.

That appears to be changing, if only in small bursts of positive growth. Yet the renewed enthusiasm for new releases shown during E3 indicates that momentum for rising retail game sales may be building.

Software sales of games on discs grew 19 percent to $354.1 million. The best-selling retail game of the month was Warner Bros.' comic-inspired action game Batman: Arkham Knight -- despite its controversial and buggy launch on PC -- followed by the long-awaited console release of popular fantasy game The Elder Scrolls Online. Warner Bros. had even more good news last month, taking the third spot with LEGO: Jurassic World and continued success of The Witcher 3: Wild Hunt, which came in fourth.

"This is the fourth month of year-over-year [software] increases so far in 2015; through the first half of the year, software is up 3 percent," NPD analyst Liam Callahan wrote in a statement. "With a strong lineup of games for the remainder of the year, there is the potential for a positive growth in the second half of the year as well."

Game console sales in particular were up 8 percent in June to $313.1 million from this time a year ago. That's a reassuring jump after months of slumping console sales had indicated that perhaps a majority of players had already upgraded to newer hardware, and the remainder of consumers were simply not interested.

Sony was pleased with the results in June thanks mostly to a special bundled version of its PlayStation 4 along with Batman: Arkham Knight. The PlayStation 4 was the top seller.

Callahan noted that these types of hardware bundles that include brand new games, and not simply older and less popular titles, helped boost the overall share of console bundles to 82 percent of sales in June 2015, u[ from 35 percent a year ago. "June 2015 was especially strong for hardware bundle sales as the 82 percent share of hardware attributed to bundles in June 2015 is above the year-to-date total of 67 percent share," Callahan wrote.

Microsoft was undeterred by Sony's performance, saying in a statement that "Xbox One sales in the US were up 51 percent over June 2014 and active global Xbox Live users (Xbox One and Xbox 360) grew 22 percent."

As has been the case in previous months, sales of games over the Internet are an even brighter spot for the industry. SuperData Research, which tracks sales and deliveries over the Internet of games and game add-ons, said the market grew 18 percent in June to $1.02 billion year over year.

"Generally speaking, Western [countries] engagement with mobile games often falls during the summer, but last month's mobile revenue was up 4 percent over May," said SuperData CEO Joost van Dreunen. SuperData's report also added that sales of mobile games were up 20 percent to $367 million. Sales of console and PC games hit a combined $314 million, up 30 percent.


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