May video game sales fall off a cliff with few new games released

May video game sales were the worst they have been in five years thanks to a low rate of new game releases.

The sales figures show that while the Xbox 360 and PlayStation 3 businesses continue to grow, the mass market Wii and portable game sales are weakening.

The figures also show there is wide variation month-to-month in the game business. For April, sales were up 20 percent, thanks to the release of more hot game titles. In March, sales were down 4 percent.

Total video game hardware, software, and accessory sales at retail stores were $743.1 million in May, down 14 percent from $866.8 million a year ago, according to market researcher NPD Group.

Overall console video game sales (excluding PC games) were $718.8 million, down 13 percent from $829.4 million a year ago.

Game hardware sales were $228.9 million, down 5 percent from $241.6 million a year ago. And game software sales were $375.8 million, down 19 percent from $466.3 million a year ago. Accessory sales, which have previously been up thanks to strong sales of Microsoft’s Kinect motion-sensing system, were $114 million, down 6 percent from $121.5 million a year ago.

If you throw in the sales of PC, console and portable games, the total is $400.1 million, down 21 percent from $503.8 million a year ago. Anita Frazier, an analyst for NPD, said that there were only 42 new retail games (SKUs) introduced in May 2011, compared with 58 a year ago and 72 in 2009.

Last year saw the release of RockStar Games’ Red Dead Redemption, while this year RockStar (which is owned by Take-Two Interactive) released the highly acclaimed LA Noire detective game. LA Noire took the No. 1 spot in sales for the month. It was followed by Bethesda Softworks’ Brink, Disney Interactive Studios’ Lego Pirates of the Caribbean: The Video Game, Electronic Arts/Valve’s Portal 2, Warner Bros. Interactive’s Mortal Kombat, Activision Blizzard’s Call of Duty Black Ops, Take-Two’s NBA 2K11, Ubisoft’s Just Dance 2, and LucasArts’ Lego Star Wars III: The Clone Wars.

“Keep in mind that purchases of content are increasingly occurring in digital format, and May saw a notable digital release in the second map pack for Call of Duty: Black Ops, which was titled Escalation,” Frazier said. “Undoubtedly, this shifted some dollars that might have been spent on new physical content at retail.”

Combined sales of the Xbox 360 and PS 3 hardware were up 28 percent for the month and are up 21 percent year to date, while Wii sales have dropped. The Xbox 360 now has 34 percent of the overall video game market, up 7 percentage points from a year ago. But even with the growth, the Wii has such a commanding lead at 86 million units sold worldwide and 36 million in the U.S. that Nintendo will likely exit the year as the leader in total console sales.

Sony said today that its PS 3 hardware sales were up 14 percent from a year ago in May, the fourth consecutive month of double-digit hardware sales growth for the company. During much of April and May, Sony was hamstrung by the fact that the PlayStation Network was down, due to a hacker attack.

Microsoft said it sold more than 270,000 hardware units in the month, and it led the pack for the fifth straight month. That was up 39 percent from a year ago. Total Xbox 360 game spending hit $140 million, and total Xbox 360 spending hit $265 million in May.

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