While the overall economy may be on the upswing, the same cannot be said for the video game industry. According to new statistics released by the NPD Group, video game sales in January were down compared to the same time period in 2010. Even though January's sales drop may not be a sign of the apocalypse, it does continue a trend of slowing sales over the past twelve months.
Video game sales for January registered at $1.16 billion. That represents a 5 percent drop from the $1.22 billion in sales for January 2010. Year over year sales were also down in December. Over the last year, sales have been down in 10 out of 12 months. The only two months in which sales increased were March and November of 2010.
Video games are not the only products within the industry that have seen rough times lately. Hardware sales dropped in January as well, gaining only $324 million as opposed to $353.7 million during the same month last year. Software sales totaled $576 million this January, which was a 5 percent drop from last January's $606 million.
Video game accessories, on the other hand, saw a 6 percent jump in its January sales. Microsoft also had a solid month, as the company claimed that its Xbox 360 console saw a 14.4 increase in its January sales after moving 381,000 units. Microsoft sold 330,000 Xbox 360 units in January of 2010.
Microsoft's positive numbers helped it stand out among the competition, as Nintendo's Wii and Sony's PlayStation 3 saw a decline in January sales. Nintendo did not immediately respond with an official comment on its Wii sales decline. Sony, however, stated that while its console sales were down, its software sales increased 25 percent over January 2010.
Will the video game industry see a continued decline in the near future? It is possible, but some analysts believe that there is a light at the end of the tunnel. Wedbush Securities' Michael Pachter stated that February and March look a tad bleak for the Nintendo Wii and portable gaming systems. The planned release of the Nintendo 3DS towards the end of March, however, could help boost software sales for handheld consoles.
Pachter also believes that the PlayStation 3 and Xbox 360 could see improvements later this year. Both consoles have future game releases that should help bolster their software sales. Optimism for the Wii is not as high. NPD Group, which reports sales for the video game industry on a regular basis, did not release an in-depth analysis for January's numbers, although the group usually does so.
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