April video game sales decline 17 percent

May 15, 2009 By BARBARA ORTUTAY , AP Technology Writer

(AP) -- Lacking the big hits that made the year-ago period a standout, U.S. video game sales dropped sharply in April for the second month in a row as customers continued to watch their wallets.

Market researcher NPD group said late Thursday that retail sales of game software, hardware and accessories dropped 17 percent last month, to $1.03 billion. Software sales plunged 23 percent to $510.7 million, more than many analysts had expected. Hardware sales, meanwhile, declined 8 percent to $391.6 million.

While the results show the gaming industry is not immune to the recession, a big culprit for the year-over-year decline was last year's launch of the blockbuster "Grand Theft Auto IV." The game hit store shelves on April 29, 2008 and raked in more than $500 million within a week. That and the launch of Nintendo's "Mario Kart Wii," another very popular game, made for a spring that game makers have not been able to match this year.

The handheld Nintendo DS was the month's best selling gaming system, which was not a surprise considering the recent launch of the DSi, its latest incarnation.

In all, Americans bought more than 1 million DS systems in April. Of these, Nintendo said about 800,000 were sales of the new DSi, a slimmer, more interactive version of the system that includes two digital cameras.

Nintendo's Wii console came in a distant second, selling 340,000 units. The company estimates it holds about a 70 percent unit share of the U.S. gaming hardware market.

Redmond, Wash.-based Microsoft Corp.'s Xbox 360 sold 175,000 units, not many more than the 9-year-old PlayStation 2 from Sony Corp. To appeal to more budget-conscious customers, on April 1 Sony cut the price of the PS2 to $99.99 from $129.99.

"This is a testament to the impact a price reduction can have on hardware acquisition, with price being only second to compelling new content as a catalyst for hardware sales," said NPD analyst Anita Frazier.

Many PlayStation fans, however, are hoping Sony will cut the price of the more expensive PlayStation 3. That system sold just 127,000 units in April. Earlier Thursday, Sony posted its first annual net loss in 14 years and reported an ongoing loss in its game segment.

Whizzing past its competition in hardware sales, Nintendo also dominated April's software sales. Four of the month's top-selling games were made by the Kyoto, Japan-based company - including "Wii Fit," "Pokemon Platinum Version" and "Mario Kart" for the Wii, which has been on store shelves for more than a year.

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