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January Sees Dip In Video Game Sales

February 18, 2011

Market researcher NPD Group reported on Thursday that total US retail sales of video game consoles and software dropped 4 percent in January. Sales of popular hardware such as Microsoft Corp.’s Kinect motion-sensing controller, were down to $1.14 billion last month from $1.18 billion in January 2010.

The sales drop would have been larger if not for the growing popularity of dancing games. The best-selling game this month was, as expected, the blockbuster shooter “Call of Duty: Black Ops” from Activision Blizzard Inc. which set entertainment industry records when it launched last November.

But Ubisoft’s “Just Dance 2″ came in at second and another dance game, “Dance Central,” which works with the Kinect, was also in the top 10. A dance-exercise game, “Zumba Fitness: Join the Party,” was fifth on the list.

“It’s not typical to see this style of game do this well outside of the holiday season,” Jesse Divnich, an analyst at Electronic Entertainment Design and Research, tolf the Associated Press (AP). The smaller-than-expected decline was due to strong sales of dancing games, which are just starting to take off, Divnich said. “Dancing is going to be the new craze.”

“It’s not going to last forever,” Divnich added. Activision killed off the iconic “Guitar Hero” last week, due to sluggish demand for the once-unstoppable franchise. Hardware sales fell 8 percent to $324 million from $353.7 million, while software sales slipped 5 percent to $576 million from $606.8 million. That’s a smaller drop than the 8 percent falloff in software sales that analysts had been expecting.

NPD Group does not include game downloads in its sales data, so the numbers can show a decline even if more people are playing games. Divnich explained that software sales are on the decline because customers are buying more games through digital downloads instead of going to stores to buy a packaged disc.

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