Overall video game revenue declined in October, as a dramatic drop in hardware sales wiped out modest gains in software, according to market researcher NPD Group Inc.
Players spent $1.03 billion last month on games and the hardware to play them, down from $1.07 billion a year earlier, NPD said.
Sales of game software rose 6% to $605 million, the first gain in five months.
But hardware sales fell 26% to $280 million, compared with the same time period last year when Sony Corp. and Nintendo Co. dropped the prices of the PlayStation 3 and Wii consoles, respectively, noted Wedbush Securities analyst Michael Pachter.
Sales of accessories rose 18% to $142 million from a year earlier, as consumers bought subscription cards and the PlayStation Move controller, which senses players' movements.
NPD analyst Anita Frazier said sales of the Move, as well as upbeat sales reports for Microsoft Corp.'s just-released Kinect for the Xbox 360, bode well for the holidays. The Kinect allows players to interact with the game without using a hand-held controller.
"Specialty controller items should contribute significantly to industry sales," Frazier said in an analyst's report.
Frazier said consumers gravitated to new releases in October, with Fallout: Las Vegas from Bethesda Softworks ranking as the top game in unit sales. Games that offered online play were up 16%, while those that lacked this element were off 2%, she said.
Although not a top 10 title, Rock Band 3 from Harmonix was the 15th-best-selling title of October, Frazier said. Parent company Viacom Inc. announced plans this month to sell Harmonix.
Frazier said that sales of consoles, hand-held games and packaged software account for only 70% of what consumers spend on games.
"While down, there are revenues being generated from digital distribution, used game sales, rentals, social network games and mobile applications, to name a few," Frazier said.