September 12, 2009

US Video Games Sales Fall For 6th Month In A Row

US video games sales of hardware, software and accessories fell in August for the sixth straight month, declining 16 percent to $908.72 million following disappointing sales of the latest "Madden" game.

According to data from market researcher NPD Group, U.S. sales of consoles and handheld devices declined 25 percent to $297.6 million, while software sales fell 15 percent to $470.32 million.

Accessories such as musical instruments to play the games "Rock Band" and "Guitar Hero" increased 2 percent to $140.8 million, NPD said Thursday.

Game makers say they are optimistic that September will show stronger sales with the highly-anticipated launch of "The Beatles: Rock Band" as well as "Guitar Hero 5."

The video game sector held out longer than many others during the current recession, but the industry began seeing double-digit sales declines in March compared with the same period of the previous year.

In addition to an economic slowdown that has resulted in plunging consumer spending, the gaming industry has also suffered from a lack of new blockbuster games this year.

As expected, Electronic Arts Inc.'s "Madden NFL 10" was the top-selling game in August, with about 1.9 million units sold across five gaming systems. 

But sales still fell short of analysts' expectations. The Associated Press cited Ben Schachter of Broadpoint AmTech as saying EA likely anticipated "a down year for 'Madden,' but ... this is likely worse than the company's internal expectations."

Price reductions in mid-August boosted sales of Sony Corp.'s PlayStation 3 by 72 percent over July.   The console sold 210,000 units in August, lagging by about 5,400 units behind sales of Microsoft Corp.'s Xbox 360, which also saw a price cut late in the month.

Nintendo Co.'s handheld DS was the month's best-selling system with 552,900 units sold.  The company's Wii console ranked second with 277,400 units sold.

"Sony's price cut should help that platform for the remainder of the year, but Nintendo still needs to cut if the industry is to recover," said Schachter.

Speaking of September, the AP cited Wedbush Morgan analyst Michael Pachter as saying he's "got a feeling that sales won't let us down."

In addition to the new "Rock Band" and "Guitar Hero" games, "Need for Speed: Shift" and "Halo ODST" should also help drive September sales, Pachter said.


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