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Video game and console sales plunge 20% in August

Sales of video game consoles such as Nintendo's Wii and Microsoft's Xbox 360 are hit hardest as consumers look forward to newer consoles.

September 07, 2012|By Alex Pham, Los Angeles Times

Not even Batman and Spider-Man could pull the interactive entertainment industry out of its sales funk, as sales of video games and consoles fell 20% in August from a year earlier despite chart-topping titles featuring the two superheroes.

Last month's sales were $515.6 million, compared with $647.2 million in 2011, according to a report from NPD Group Inc., a market research firm.

Sales of console hardware such as Nintendo Co.'s Wii and Microsoft Corp.'s Xbox 360 were hit hardest, registering a 39% drop, as consumers may have held back spending in anticipation of newer consoles on the horizon. Nintendo, for example, is expected to release its next-generation Wii U game console this year, and Microsoft and Sony Corp. are reportedly developing their next game machines.

"The current hardware systems are showing their age," said Anita Frazier, NPD's game analyst. "So it goes without saying that it would be great to have new systems breathe life into traditional retail industry sales."

Game software rang up $252.8 million in sales last month, down 11% from $283.3 million a year earlier.

Mirroring this summer's slate of superhero movies, August's top 10 games had three titles featuring comic book characters, "Lego Batman 2: DC Super Heroes," "Batman: Arkham City" and "The Amazing Spider-Man."

That wasn't enough to prevent the industry from posting its ninth consecutive double-digit monthly sales decline.

"The main reasons … are a lack of big title releases, typical slowdown towards the end of a video game console cycle, and the fact that the fastest-growing segment of the video game industry, digital, is not captured by NPD data," Arvind Bhatia, an analyst with Sterne Agee, wrote in a note to investors.

NPD, which has been gathering data on digital and mobile game sales but has not yet released comparative statistics, said Wednesday that the number of people playing mobile games this year exceeded those playing traditional "hard core" games such as "Call of Duty: Black Ops" and "World of Warcraft."

Nevertheless, Frazier said, players who identified themselves as "hard-core gamers" spent 35% more money on physical games than the average player.

"The industry's foundation will always be the core gamer," Frazier said.

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