October Video Game Retail Sales Drop 4 Percent

By Ed Silverstein November 17, 2010

U.S. retail sales of video game hardware, software and accessories dropped 4 percent in October as demand for most gaming consoles declined from a year earlier, according to NPD Group.

The AP reports that overall game sales were $1.07 billion last month, down from $1.11 billion in October of last year, NPD said on Tuesday.

Year-to-date sales were down 8 percent at the end of October, at $11.07 billion.

"Keep in mind that these sales only reflect new physical retail sales," says NPD analyst Anita Frazier. "While down, there are revenues being generated from digital distribution, used game sales, rentals, social network games and mobile applications to name a few."

Hardware sales dropped 26 percent to $280 million from $381 million a year ago. With the exception of Microsoft Corp.'s Xbox 360, every gaming system saw a decline in unit sales, NPD said. The Xbox sold 325,000 units, up 30 percent year-over-year, Microsoft said.

The AP reports that sales of game software increased 6 percent to $605 million from $573 million.

"NBA 2K11" from Take-Two Interactive Software, Inc., was the month's best-selling title. It was followed by "Fallout: New Vegas" from Bethesda Softworks and "Medal of Honor" from Electronic Arts, Inc., according to the AP.

The number doesn't include "Call of Duty: Black Ops," which went on sale Nov. 9, and shattered the entertainment industry sales record held by its predecessor, "Call of Duty: Modern Warfare 2," the AP added.

Sales of game accessories jumped 18 percent to $142 million.

Reggie Fils-Aime, the president of Nintendo of America, said in a recent interview he expects Nintendo to do well during the November-December holiday sales period.

"Last year, we sold close to 50 percent of hardware on (the holidays)," he said. While Nintendo is not planning to cut the price of the $199 Wii, Fils-Aime added that some retailers are doing this on their own as they work to lure shoppers into their stores.

In a related matter, the NPD Group, Inc.'s ninth annual survey of consumers' holiday spending intentions show that 62 percent of respondents said they will spend time doing their “homework” or “pre-search” before they buy gifts this holiday season.

NPD's holiday market research survey asked consumers what kinds of things they would rely on to do their homework before making gift purchases. Almost 50 percent said they would go online to do their homework. Twenty-two percent said catalogs would be their choice, followed closely by consumer reviews with 20 percent and TV ads with 17 percent.

Ed Silverstein is a TechZone360 contributor. To read more of his articles, please visit his columnist page.

Edited by Tammy Wolf

TechZone360 Contributor

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