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Sales of video games rise 4%

Sales of consoles tumble 9% to $349 million from $382.9 million in 2010.

October 14, 2011|By Alex Pham, Los Angeles Times
  • Madden NFL 12 from Electronic Arts was the top-selling video game of the month.
Madden NFL 12 from Electronic Arts was the top-selling video game of the… (AP )

The starting gun for the video game industry's crucial holiday season went off with a bang in September as sales of games perked up 4% after four consecutive months of declines, according to a report from market research firm NPD Group.

But as the industry scored $630.2 million in sales of games sold at retail stores last month, up from $612.1 million a year earlier, sales of consoles tumbled 9% to $349 million from $382.9 million in 2010, as manufacturers cut the cost of devices used to play those games. Nintendo's hand-held 3DS console, for example, saw its price tag fall to $170 from $250 when it launched in March.

The decline in hardware offset the gains in game sales, leading to a 6% overall drop in total sales to $1.16 billion from $1.23 billion in September 2010.

Nevertheless, the modest, but notable, improvement in software sales is expected to continue through the remainder of the year as the industry heads into the busy holiday season, when as much as half of game retail sales are rung up.

"Every month will be up from here," said Michael Pachter, an analyst with Wedbush Securities.

Fueling analysts' optimism is an unusually robust lineup of big-budget titles scheduled for release in the coming weeks, including Battlefield 3, Batman: Arkham City, Uncharted 3: Drake's Deception, Star Wars and Call of Duty: Modern Warfare 3.

Even though game sales are expected to finish strong, many believe that the industry will still end up down from last year because of devastating declines earlier this year, particularly during the summer months. July sales, for instance, plunged 26%, followed by a 21% drop in August.

Pachter estimates the year will show a 4% decline compared with 2010.

Notably, sales of online, social and mobile games are not included in NPD's monthly sales report. All three categories have grown substantially as consumers have spent more time playing games on Facebook and on devices such as the iPad and Android smartphones.

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