September VideoGame Sales Decline, But Skewed by 'Halo 3'

NEW YORK (AP) - Video game sales declined in September, as expected. But for those quick to blame the economic downturn, it's good to note that comparisons were skewed by "Halo 3," the blockbuster from Microsoft Corp. that accounted for more than a third of all game sales in the same month last year.

Year-to-date, U.S. retail sales of video game hardware, software and accessories are up 26 percent, according to market researcher NPD group, which released the figures late Thursday.

Overall, Americans spent $1.27 billion on video games last month, down 7 percent from the year-ago period. Hardware sales dropped 9 percent to $497.98 million and software sales fell 6 percent to $616.1 million.

Nintendo's Wii console and the DS handheld held their place as the two best-selling gaming systems. Boosted by a significant price cut, Microsoft's Xbox 360 sold 347,200 units during the month, in third place and up 78 percent from a lackluster August performance.

"This increase, despite the acceleration of economic turmoil during the month of September, is (a) solid indicator of the health of the industry heading into the holiday season," said NPD analyst Anita Frazier in an e-mail statement.

Microsoft cut the price of the Xbox 360 at the beginning of September, with the cheapest version selling for $200, less expensive than the Wii, which retails for $250. The cut "certainly had its intended effect," said Microsoft spokesman David Dennis.

Industry executives have been cautiously optimistic about the holidays even as the U.S. economy suffers. Game companies make the bulk of their money during that period, and Dennis said sales generally start to accelerate around late October leading into November.

"It's really tough to tell how the bigger picture is going to do," Dennis said. "But if history tells us anything, it tells us we should be in pretty good shape."

Microsoft, along with Sony Corp. and Nintendo, are betting that people will cut back on things like travel, restaurant outings and movie tickets before games, which they can enjoy at home. The Wii, for one, remains "broadly sold out" even with Nintendo increasing production levels, noted Cammie Dunaway, executive vice president of sales and marketing at Nintendo of America.

The month's best-selling game was "Star Wars: The Force Unleashed" from LucasArts, with 610,000 units sold. In comparison, "Halo 3" sold 3.3 million copies last September following its Sept. 25 debut.

The NPD Group doesn't include computer games in its video game tally, but noted that couple of PC titles — "Spore" and "Warhammer Online," both from Electronic Arts Inc., sold very well in September.