May video game sales fall 14%

The video game industry hit the pause button on sales in May, posting its lowest monthly revenue from U.S. retail stores such as Best Buy Co. and GameStop Corp. since October 2006.

Sales of games, consoles and game accessories such as extra controllers dropped 14% last month to $743.1 million, down from $866.8 million in May 2010, according to a report released Monday from NPD Group, a market research firm.

“A light slate of new releases is at the heart of last month’s performance,” said NPD analyst Anita Frazier. Just 42 titles were released in May, compared with 58 in the same month last year. As a result, only 28% of last month’s game sales came from new releases, down from 41% in May 2010.

With fewer new games available, foot traffic in retail stores declined and, along with it, impulse purchases, Frazier said.


The release of a digital add-on level for Activision Blizzard Inc.'s Call of Duty: Black Ops, which was sold via download from Internet-connected game consoles, also probably diverted consumer dollars on games away from traditional retail stores, she said.

NPD’s monthly game reports do not include digital downloads or online spending, which analysts have estimated account for a quarter to one-third of total spending on games.

The decline in shrink-wrapped discs sold at retail belies a game industry that’s actually growing. A report by Deutsche Bank Securities projected that U.S. game sales, not including game consoles, would increase from $20.4 million in 2010 to $29.8 million in 2014. Much of that increase, however, is expected to come from online games such as World of Warcraft, social games such as CityVille and mobile games such as Angry Birds — not disc-based games.

For the last year, overall video game sales have suffered setbacks as average consumers curtailed spending on Nintendo Co.'s Wii console, as well as on music games such as the once-hot Guitar Hero. Titles for dedicated core game players who prefer Microsoft Corp.'s Xbox 360 or Sony Corp.'s PlayStation 3 have performed relatively well.

In May, for example, the Xbox 360 and the PS3 saw increases in unit sales, but sales of the Wii and hand-held DS consoles declined. In addition, 6 out of the 10 bestselling titles last month were games designed to appeal to hard-core gamers, including L.A. Noire, Brink, Portal 2, Mortal Kombat 2011, Call of Duty: Black Ops and NBA 2K11.