U.S. Video-Game Retail Sales Tumbled 25 Percent in May

U.S. retail sales of video-game hardware, software and accessories fell 25 percent to $386.3 million last month as consumers shifted to digital titles played on mobile devices and awaited next-generation consoles.

Hardware sales fell 31 percent to $96 million from a year earlier, Port Washington, New York-based NPD Group Inc. said in an e-mail today. Software sales for the current generation consoles also tumbled 31 percent, to $175.1 million.

The games and console market is in the middle of a two-year slump as consumers increasingly play Web-delivered titles on smartphones and tablets and hard-core gamers await the first new machines from Sony Corp. (6758) and Microsoft Corp. (MSFT) in seven years. Earlier this month, in a face-off between the rivals’ new machines at the annual E3 video-game conference in Los Angeles, Sony’s PlayStation 4 won the first round by pricing its machine $100 below Microsoft’s Xbox One and offering more flexibility about how to play, trade and sell games.

Total spending on U.S. video-game hardware and software, including used games, rental and digitally delivered content, was $787 million, said Liam Callahan, an NPD analyst. Physical sales accounted for about 50 percent of total U.S. spending on games, NPD said.

Microsoft, based in Redmond, Washington, said in an earlier statement that U.S. retailers sold 114,000 Xbox 360 game consoles in May, a decline of 29 percent from 160,000 a year earlier. The company held its spot with the No. 1 selling major console model.

Both the PlayStation 4, priced at $399, and the Xbox One, priced at $499, will go on sale this fall. Nintendo Co.’s Wii U, released in November, sells for about $300 in the U.S. and has missed sales targets.

Nintendo’s 3DS handheld game console edged out Microsoft as the top-selling platform, including hardware and software, in May, Callahan said in the statement, without citing figures.

The Kyoto, Japan-based company said in a statement today that its titles “Donkey Kong Country Returns 3D” and “Luigi’s Mansion: Dark Moon” helped increase software sales by more than 60 percent last month, compared with a year ago.

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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