U.S. video game store sales fell 29 percent in June, with total industry sales falling to $699.8 million from $989.5 million a year ago, according to consumer market research firm NPD Group. This reflects that while games are growing as a business, the proportion of games that are sold through physical stores is falling.

The poor performance in June was a little worse than in May, when sales fell 28 percent, and April, when sales fell 42 percent when compared to a year ago. NPD says that the total consumer spending on games — when adding digital sales and used games, rentals, and subscriptions — was more like $1.36 billion in the month of June, compared to $1.17 billion in May.

The weak brick-and-mortar store sales account for 50 percent to 60 percent of sales. Anita Frazier, an analyst at NPD, said the sheer reduction in the number of game launches is one reason for the shortfall.

In May, hardware sales were $201.3 million, down 45 percent from $228.8 million a year ago. Software was $328.7 million, down 29 percent from $461.6 million a year ago. Accessory sales were $169.8 million, up 4 percent from $163.0 million a year ago. Accessory sales were up because of strong game-card sales (such as cards for Xbox Live subscriptions), which are “exploding,” Frazier said.

The estimated total consumer spending on games includes physical video and retail games, used games, game rentals, subscriptions, full-game digital downloads, social network games, downloadable content, and mobile games. Not counting hardware, sales were $362.8 million, down 27 percent from $496.3 million a year ago.

NPD is working with video game research company EEDAR to try to come up with more accurate numbers for global digital and physical game sales worldwide.

Microsoft said that total spending on the Xbox 360 was $272 million in June, compared with $209 million in May. The company sold more than 257,000 consoles in the U.S. in June (160,000 in May), holding a 47 percent share of the overall console market. That is the 16th month in a row that the console has held more than a 40 percent share of current-generation console sales. That may be good for Microsoft, but the company seems locked in a market share battle — a red ocean where sharks fight for limited fresh meat — instead of a blue ocean battle.

Wedbush Securities analyst Michael Pachter had estimated that June software sales would be down 34 percent compared to a year ago.

The top game of June was Warner Bros.’ Lego Batman 2: DC Super Heroes (pictured at top) on multiple platforms. The second was Tom Clancy’s Ghost Recon: Future Soldier on multiple platforms. Diable III from Blizzard was No. 3 on the PC. Other top sellers in order were Max Payne 3 from Take-Two Interactive, NBA 2K12 from Take-Two Interactive, Batman: Arkham City from Warner Bros., Pokémon Conquest from Nintendo, Call of Duty: Modern Warfare 3 from Activision Blizzard, Battlefield 3 from Electronic Arts, and The Amazing Spider-Man from Activision Blizzard.