The economy is getting to everyone these days, and even hardcore gamers are tightening up their wallets in light of it.

Market research from NDP says that video game sales are down 4 percent this compared to March of 2010. This figure, however, only includes hardware games, not digital delivery. Downloadable games make up for 23 percent of the market.

Despite that, hardware amounted to some $494.5 million, accessories $241.3 million and software for console and portables clocked in at $735.4 million, mostly driven by the new Nintendo 3DS which sold some estimated 400,000 units. 

"The 3DS launched in the U.S. on 3/27, so seven days of retail sales are included in this months results. The 3DS launch compares quite favorably to that of the best-selling dedicated handheld gaming platform of all time, the Nintendo DS,” said Anita Frazier, Senior Analyst, NPD Group. “While the 3DS sold about 100K units less than the DS did in its launch month, we must consider that the DS launched in November and had holiday seasonality and a price differential of about $100. Because of the price differential, the 3DS generated greater revenues than did the DS in its launch month in November 2004. In addition, the 3DS was launched in an environment where there are more devices that can support the portable gaming experience such as tablets and smartphones.”

NPD will release a full report on first quarter sales in June. So far, physical game sales were down 1 percent but the overall market, including downloads, "will likely result in net industry growth," the company said in its release.

March was also good for Sony and Microsoft. They increased unit sales of the Xbox 360, PlayStation 3 and PSP portable, NPD said.

The top two games were "Pokemon White Version" and "Pokemon Black Version," both for Nintendo's DS, followed by THQ's "Homefront" for the XBox, PS3 and PC.

In other video game news, video game innovator Gerald A. Lawson who pioneered cartridge gaming, passed away last weekend. Lawson was the man behind the Channel F, the first video game console that used interchangeable cartridges. The technology, which predates the Atari system by a year, set the standard for how games are played today. Lawson is also one of the founders Videosoft, a software developer that produced games for the Atari 2600 in the early 1980s. Atari then grew more popular than the Fairchild Channel F. Lawson received an award from the International Game Developers Association on the development of innovation.