NPD: Industry Down 9% In June As Software Slumps, 360 Overtakes Wii

The U.S. game industry has had another month of year-over-year declines: according to tracking firm NPD, retail console revenues dropped 6 percent from June 2009 to $1.1 billion, following last month's 5 percent year-over-year decline. With no major game debuts -- last month's top three games, led by Red Dead Redemption's Xbox 360 version, stayed the top three -- software was hit particularly hard, falling 15 percent from $627.0 million to $531.3 million in June. Meanwhile, hardware revenue rose 5 percent to $410.7 million from $382.8 million, a reversal of last month's result which saw software up and hardware down. And within that hardware result, Microsoft pulled off a victory over Nintendo in the home console front for the second time this year: Xbox 360 outsold Wii by a healthy 7 percent margin, although the Nintendo DS still took the top overall hardware sales slot for the month. In a research note, NPD analyst Anita Frazier said that, while June's results were unfortunate, the arrival of new motion controllers could provide a boost to the industry, and NPD plans to take into account more non-traditional revenue streams. "Given the strong slate of content still to come, and the release of the Move and Kinect controllers, which I believe will spark additional interest in gaming, I think we could see the total year new physical retail sales come in at $20 billion," said Frazier. "We'll also be reporting consumer reported sales of digitally distributed, rental and used games content to provide insight into those non-POS sources of game sales." Software It was a lackluster month for software, both in debuts and in total revenue. The only new releases to make it on to the chart were N-Space's Nintendo DS version of Toy Story 3, which entered at number seven, and Traveller's Tales' LEGO Harry Potter: Years 1-4 on Wii, which reached number nine. Every other game on the list was a carryover from last month, with the impressive exception of Just Dance, which managed to reach fifth place with 174,800 units, six months after it was first released for Wii. Red Dead Redemption's 582,900 units on Xbox 360 and 380,300 units on PlayStation 3 bring the game's total U.S. sales to date up to nearly 2.5 million, making it the country's best selling game of the year so far. The total U.S. retail game sales for June 2010 are as follows: 1. Red Dead Redemption (Rockstar San Diego/Take-Two, Xbox 360), 582,900 2. Super Mario Galaxy 2 (Nintendo, Wii), 548,400 3. Red Dead Redemption (Rockstar San Diego/Take-Two, PS3), 380,300 4. New Super Mario Bros. Wii (Nintendo, Wii), 200,900 5. Just Dance (Ubisoft, Wii), 174,800 6. Wii Fit Plus (Nintendo, Wii) 7. Toy Story 3 (n-Space/Disney, NDS), 164,000 8. UFC 2010: Undisputed (Yuke's/THQ, Xbox 360) 9. LEGO Harry Potter: Years 1-4 (Traveller's Tales, Warner Bros., Wii), 136,000 10. UFC 2010: Undisputed (Yuke's/THQ, PS3) (While NPD no longer publicly provides figures for games beyond the top five, Nintendo separately released sales data for Toy Story 3 and LEGO Harry Potter.) Hardware Hardware contrasted favorably to software this month, with a big revenue boost that reflects an even bigger increase in unit sales. While revenue was up 5 percent, unit sales were up a massive 35 percent, thanks to a combination of price cuts and improved Xbox 360 and PlayStation 3 pickup. In particular, Xbox 360 saw the mid-month release of its first major form factor revision, which was accompanied by $50 price reductions on the older models of the console. "Hardware sales saw a notable uptick from May on an average sales per week basis, and all three current gen console systems saw unit sales increases over last year; in particular, the Xbox 360 and the PS3," wrote Frazier. "The Xbox 360 experienced its second largest non-holiday month after September '07 when Halo 3 launched, and the PS3 has now garnered 11 consecutive months of year-over-year unit sales increases." U.S. hardware sales for the month read as follows: 1. Nintendo DS: 510,700 2. Xbox 360: 451,700 3. Wii: 422,500 4. PlayStation 3: 304,800 5. PSP: 121,000