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U.S. Video-Game Sales, Tumble 29% in June, NPD Says

U.S. sales of video-game hardware, software and accessories tumbled 29 percent in June to $699.8 million from a year earlier, researcher NPD Group Inc. said today.

Retail sales totaled $989.5 million a year ago, when more game releases buoyed sales, NPD, a research firm in Port Washington, New York, said in an e-mailed statement

The industry is experiencing a prolonged retail-sales slump as buying shifts to digital downloads and games played on Facebook Inc. (FB) and other social sites. Sales of packaged video games have fallen for nearly two years. With digital downloads added, consumers probably spent $1.36 billion on games in June, NPD estimated.

Nintendo Co., the video-game machine maker trying to recover from an annual loss, said its 3DS portable console surpassed more than 5 million units in U.S. sales since it was launched in March last year.

In June, the company sold more than 155,000 of the 3DS console, more than 150,000 of its older Nintendo DS portable and almost 95,000 of its Wii home console, the company said in an e- mailed statement today, citing NPD data.

“The 3DS is still up nearly 25 percent over where the Nintendo DS was in a similar point in time after release to market, and has topped portable hardware sales for the last 11 months,” Anita Frazier, an NPD analyst, said in the NPD statement.

Handheld Sales

Nintendo, based in Kyoto, Japan, said it held a 75 percent market share for handheld sales for the second consecutive month. Early sales of the 3DS introduced last year, which enables users to play glasses-free 3D games, were constrained by the supply of new games and by what then were the prices for both consoles and software, Nintendo has said.

The company lost almost half a billion dollars in the fiscal year ended March 31, on declining sales of its Wii console and competition from games players on Facebook, Apple Inc. (AAPL)’s mobile devices and other platforms.

On Aug. 19, Nintendo will begin selling the 3DS XL, which features 90 percent-larger screens, and a new “Super Mario” game, the company said. Also this year, Nintendo will begin offering Wii U, the video-game industry’s first new home console since 2006.

The company, the creator of the “The Legend of Zelda,” predicts that a 37 percent jump in sales of the 3DS, together with the introduction of its new Wii U console, will help drive a return to profit this fiscal year.

The 3DS XL’s upper screen, which can display 3-D images, will be enlarged to 4.88 inches compared with the existing model’s 3.53 inches, Nintendo said.

Microsoft Corp. (MSFT) said U.S. retailers sold 257,000 Xbox 360 game consoles in June, giving the company more than 40 percent market share for the 18th straight month. A year ago, Microsoft sold 507,000 of the consoles, NPD said then.

Video-game makers voluntarily report their sales tallies. Sony Corp. (6758) often doesn’t report monthly figures, and didn’t for June.

To contact the reporter on this story: Cliff Edwards in San Francisco at cedwards28@bloomberg.net

To contact the editor responsible for this story: Anthony Palazzo at apalazzo@bloomberg.net

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