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Recession Finally Smacks Gaming Industry

The latest numbers from research group NPD report that U.S. sales of video games actually fell 17 percent in the month of April compared to April 2008, dropping down to $1.03 billion USD in revenue compared to the $1.24 billion received this time last year. This is the second month in a row that the industry has seen a continued drop, with March sales racking in only $1.43 billion in revenue, a 30-percent drop compared to March 2008 figures. If anything, the recent downward spiral indicates that the gaming industry, thought to be immune during recent economical issues, is not quite as impervious as originally speculated.

According to the firm, hardware sales plunged 8 percent to $391.6 million during April, however software sales took the biggest hit, dropping a whopping 23-percent to $510.7 million. The Nintendo Wii was actually the top selling console for the month, but still managed to show a huge drop in sales this year, taking more than a 50 percent hit, down to 340,000 units. Microsoft's Xbox 360 came in second with 175,000 units sold, dropping only 7 percent compared to April 2008. Surprisingly enough, Sony's PlayStation 2 came in third due to a price cut down to $99.99; Sony's PlayStation 3 came in fourth.

In a press release distributed yesterday, Nintendo's outlook didn't appear quite so bleak. The NPD Group said that Nintendo sold more than 827,000 Nintendo DSi units in April alone, and an additional 251,000 Nintendo DS Lite units, making a combined total of 1.04 million DS units sold in April alone, and more than 30 million for the entire DS line in the United States. “Nintendo systems and software represented 56 percent of the industry total shares in April, indicating continued strong consumer preference for quality and value,” said Cammie Dunaway, Nintendo of America’s executive vice president of Sales & Marketing. “Looking ahead, we are excited to introduce active-play games like Punch-Out!! and Wii Sports Resort into the market.” Nintendo claimed four titles in April's Top 10, including Wii Fit, Pokemon Platinum, Mario Kart, and Wii Play.

Microsoft also seemed quite positive despite the sudden drop in sales. NPD results show that Xbox 360 numbers were actually up 28 percent in the first four months of 2009, when compared to the same timeframe in 2008, making it the fastest-growing console in the USA so far this year. Microsoft recognized the "dip" in sales, and also attributed last year's sales to the release of Grand Theft Auto 4. Staying positive, Microsoft said that four Xbox 360 games claimed their places in April's Top 10 list including The Godfather II, Resident Evil 5, Guitar Hero: Aerosmith, and Guitar Hero: Metallica.

As both Nintendo and Microsoft have indicated, consumer spending may be low, but they're still willing to shell out the big bucks for their favorite games and consoles. "While the continued difficult economic environment is a factor to consider, our monthly consumer spending indicator study still shows that video games is the category that consumers tell us they're least likely to cut their spending on in coming months," NPD analyst Anita Frazier said in a statement.

Frazier also said that despite April 2009's lackluster performance, it was still the second-best April the industry has seen to date. Unit sales across the board--from the Wii to the PlayStation Portable--were down just 6 percent. The remaining revenue decline stemmed from the result of reduced "average selling prices."