Console video game sales fall for sixth straight month

Dragged down by the recession and free games, the U.S. console video game industry saw its sales fall for the sixth consecutive month in August, according to market researcher NPD Group.

Sales were $908 million in August in the U.S., down 16 percent from $1.09 billion a year ago. Anita Frazier, an analyst for NPD, said the remaining four months of the year would have to be up 14 percent in aggregate for 2009 to be flat compared with 2008 sales.

Video game console sales are clearly feeling the bite of the recession, and they may be hurt by the abundance of free online games as well. Even as console companies feel the bite, companies that offer free-to-play games such as Nexon saw revenues grow 32 percent in August compared to a year ago. Big titles are still coming this fall, but it’s interesting that even big titles such as Electronic Arts’ Madden NFL 10 football game can’t even turn around sales compared to a year ago.

The price cuts for the PlayStation 3 and Xbox 360 hardware led to an increase in hardware unit sales, even though they both happened relatively late in August. The full effect of the $100 price cuts will be reflected in September sales. Sony introduced a smaller version of its PS 3 console on Sept. 1 and cut its price, and Microsoft matched the cuts a week later.

With the exception of the PlayStation 2, all hardware systems saw higher unit sales in August compared with July. The PS 3 saw a 72 percent increase compared to July, thanks to the price cut. One of the key questions is whether Nintendo will cut its Wii console price, which has been at $249 since the console’s introduction in 2006. The price cut by Nintendo is long overdue.

Electronic Arts’ Madden NFL 10 took the top spot in game sales, selling nearly 1.9 million units across five different platforms. Another big seller was Batman: Arkham Asylum (pictured, published by Eidos/Warner Bros.), which I consider to be one of the delightful surprises of the normally dull summer game season. In September, game sales should see a boost with the launch of big titles like The Beatles: Rock Band and Guitar Hero 5.

Overall hardware sales were down 25 percent to $297 million, while software sales fell 15 percent to $552 million. Accessories were up 2 percent to $137 million. The Nintendo DS came out on top for hardware sales, selling 552,900 units. The Wii sold 277,400 units, the Microsoft Xbox 360 sold 215,400 units, the Sony PlayStation 3 sold 210,000 units, the Sony PlayStation Portable sold 140,300 units, and the PS 2 sold 105,900 units.

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