Video Game Sales Remain Depressed, Wii Loses Ground

Video game sales were down again in June. The introduction of new games and cut in console prices by Microsoft Corporation (NYSE: MSFT), Sony (NYSE: SNE), and Nintendo (OTC:NTDOY) have been trumped by faltering consumer confidence amid consumer worries about jobs and access to credit.

NPD reports that software sales declined 15% to $531.3 million in the US compared to June a year ago. Console sales were down 5% to $401.7 million. Total console sales were led by Nintendo. The PlayStation 3 from Sony sold more than 304,000 units for the month. Microsoft’s Xbox 360 sold nearly 452,000 units. Nintendo Wii sold 510,700 units in June. The growth rate of the Wii, at 16%, lagged the others. Xbox sales rose 88% and PS3 sales were up 85%.

It was sales of smaller handheld devices that pulled hardware sales for the entire industry down, and Nintendo was hurt badly in that category. U.S. sales of Nintendo DS handheld video-game player fell by a third.

Software sales were hurt due to a lack of blockbuster releases. According to MarketWatch, the release slate for the month was considered weaker than May, which had popular titles such as “Red Dead Redemption,” “Super Mario Galaxy 2” and “UFC 2010: Undisputed.”

The industry’s only chance to salvage the year is the holiday season. The economy may have improved more by then. Price cuts on consoles could bring more consumers into stores. The sector is in for at least another year of depressed results of sales in October, November, and December are not extraordinary.

Douglas A. McIntyre