Handheld Videogame System Sales Tumbled in July, NPD Says

U.S. videogame industry sales were a mixed bag in July, according to NPD sales data. The gloomiest results were for handheld game systems. The DS and PSP were the only systems whose sales declined from a month and a year earlier.

The PSP has been struggling consistently in the U.S. DS sales had been declining year to year throughout 2010, but the system was still the No. 1 system overall each month through July except January. The DS, however, slipped to No. 2 in August, behind the Xbox 360. Last month was the first since September 2007 that Microsoft’s console was No. 1, NPD analyst Anita Frazier said. Xbox 360 sales were driven in September 2007 by the release of its game Halo 3.

Xbox 360 sales grew to about 443,500 units in July from about 202,900 in July 2009 (CED Aug 17/09 p8), boosting its U.S. installed base to about 21.05 million. Driving its sales this time was Microsoft’s release of a new slim-format SKU of the console in June (CED June 15 p1), Frazier said. But the 360 received a slightly stronger boost in sales from the new hardware in June, when about 451,700 consoles were sold (CED July 19 p1). The new 360 SKU helped the system top the Wii in June for the first time since February.

DS sales across all configurations fell to about 398,400 in July from about 538,900 in July 2009 and about 510,700 in June this year. Its U.S. installed base grew to about 42.34 million, still far better than any other current-generation system. Neither Nintendo of America (NOA) nor NPD said how many of the DS systems sold were the DSi or newer DSi XL. Nintendo is counting on the arrival of its 3DS system to give its DS platform a lift. The 3DS achieves stereoscopic 3D effects without the need for special glasses. It will ship by March 31, Nintendo said. More than 3.4 million DS systems were sold in 2010 through July, NOA said.

The PSP was again the weakest-selling current-generation system in July, its sales tumbling to about 84,000 from about 122,800 in July 2009 and about 121,000 in June this year. Its U.S. installed base inched up to only about 17.5 million, still far behind the DS. It wasn’t clear how many of the PSPs sold were the download-only PSP Go. NPD and Sony Computer Entertainment America (SCEA) don’t break out Go sales.

The Wii was the No. 3-selling system in July, its sales increasing to about 253,900 from about 252,500 in July 2009. But sales were down from about 422,500 in June this year. Its U.S. installed base grew to about 29.89 million. More than 2.71 million Wiis were sold in 2010 through July, NOA said. It “sold more than 650,000 videogame systems in July -- more than any other company,” it said, combining DS and Wii sales. Microsoft, unlike its rivals, offers only one system.

PS3 sales grew to about 214,500 units in July from about 121,800 in July 2009. But sales were down from about 304,800 in June this year. Its U.S. installed base grew to about 12.94 million, still far behind the Wii and Xbox 360.

Wii sales face a major hurdle this fall, when Microsoft launches its Kinect for Xbox 360 and Sony its PlayStation Move motion control systems. “Nintendo appears to us to be the odd man out, chugging along with the same hardware model it introduced in 2006 (albeit a different color), while Microsoft and Sony have substantially upgraded their core console models” in addition to the new control systems, Wedbush Morgan Securities analyst Michael Pachter said Friday.

The significant decline in handheld system sales from a year earlier didn’t keep overall U.S. videogame hardware sales from growing 12 percent from July 2009 to $313.8 million. Total U.S. videogame industry sales -- including hardware, software and accessories -- dipped 1 percent to $846.5 million, NPD said. Software sales fell 8 percent to $403.3 million, while accessory sales fell 2 percent to $129.3 million. Year to date through July, only accessory sales were up from 2009, by only 3 percent to $1.16 billion, NPD said. Total industry sales were down 8 percent at $7.51 billion, with hardware down 13 percent at $2.43 billion and software down 8 percent at $3.92 billion.

The month’s best-selling game was Activision Blizzard’s new StarCraft II: Wings of Liberty, which Frazier said moved about 721,000 units in July. But it wasn’t on NPD’s videogame sales chart because it’s a PC title. The game took in $47 million in sales, Pachter said.

The best-selling videogame was NCAA Football 11 from Electronic Arts (EA), which Frazier said moved about 692,000 units across all platforms. The best-selling SKU of any game was the 360 version of NCAA Football 11, accounting for about 368,000 copies alone. The PS3 version was No. 2, with about 298,800 sold. Another new release, Microsoft’s 360 game Crackdown 2, was No. 3, with about 208,800 sold. It was followed by Nintendo’s Wii game Super Mario Galaxy 2, with about 193,000 sold. It was released in May. Rounding out the top five was Warner’s Lego Harry Potter: Years 1-4 for the DS, with about 141,700 sold. The Wii version was No. 7, with more than 133,000 sold, NOA said. Two other Nintendo games were in the top 10: Dragon Quest IX: Sentinels of the Starry Skies for the DS at No. 8, with more than 132,000 sold, and New Super Mario Bros. Wii at No. 9, more than 128,000 sold, NOA said. Take-Two Interactive’s Red Dead Redemption, the No. 1 game for two straight months, tumbled to No. 7 in its third month. Take-Two still gained market share in July, along with Microsoft, SCEA and Ubisoft, while EA and Nintendo were among publishers losing share despite the strength of some of their SKUs.

The Xbox 360 1,600 point card was “the best-selling accessory SKU for the fifth consecutive month,” Frazier said. The strong demand for points and subscription cards “points to the activity that is happening in the industry outside the traditional retail channel,” she said. Point cards are used by consumers to pay for online game content, among other things. Online transactions aren’t reflected in NPD’s sales data.