U.S. Video Game Sales Drop 20% in July, NPD Reports

U.S. retail sales of video-game software, hardware and accessories declined 20 percent last month to $548.4 million, according to researcher NPD Group Inc.

Hardware sales fell the most, shrinking 32 percent to $150.7 million from the previous year, the Port Washington, New York-based company said today in an e-mailed statement.

The industry is experiencing a long-term slump in retail sales as buyers move to digital downloads and games played on Facebook Inc. (FB) and other social sites. In the second quarter ended June 30, U.S. consumer spending on retail games fell to $1 billion, leading to an overall decline of 16 percent. Spending on digital content rose 17 percent to $1.47 billion, NPD said yesterday.

“While this growth is in stark contrast to the declines in new physical hardware and software sales, the size of digital sales is not quite large enough to offset these declines,” NPD analyst Anita Frazier said in yesterday’s statement.

Microsoft Corp. (MSFT) held the console lead for the 19th consecutive month, selling 203,000 Xbox 360 units in July, the company said in a statement today. The Redmond, Washington-based company sold 277,000 units a year ago.

The second quarter featured a relatively light slate of new game releases, as publishers withheld popular updates such as shooter-games “Call of Duty” and “Halo” in anticipation of a pickup in demand for holiday gift-giving.

Nintendo Co., the video-game machine maker trying to recover from an annual loss, plans to begin selling on Aug. 19 in the U.S. a larger-screen 3DS XL portable game console. Also this year, Nintendo will begin offering Wii U, the industry’s first new home console since 2006.

Nintendo, based in Kyoto, Japan, didn’t release individual sales figures for July. Video-game makers voluntarily report their sales tallies. Sony Corp. (6758) often doesn’t report monthly figures, and didn’t for July.

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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