News : U.S. video game sales down 17 percent in April

By Gabriel Madway

SAN FRANCISCO (Reuters) - U.S. sales of video games fell 17 percent in April to $1.03 billion, research group NPD said on Thursday, the second steep monthly decline in a row.

Game software sales fell 23 percent to $510.7 million in April, while hardware sales dropped 8 percent to $391.6 million. Sales of accessories declined 15 percent.

Hudson Square Research analyst Daniel Ernst said while the economy had some impact on the month's sales, the more important factor was a tough comparison from a year ago.

"The big driver in games is content, so last year you had two of the biggest games of the year launch in April, and that was not the case this year," he said, referring to "Grand Theft Auto 4" and "Mario Kart."

Nintendo's (7974.OS) Wii was the top-selling game console again in April, although sales fell more than 50 percent from a year ago to 340,000 units, NPD said.

Microsoft Corp's (MSFT.O) Xbox was No. 2 with 175,000 units sold, down 7 percent. Sony Corp's (6758.T) PlayStation 2 (PS2) was in third place, followed by the PlayStation 3. Sony cut the price of the PS2 by 23 percent to $99.99 at the end of March.

Ernst said Nintendo's shares may be hurt by the NPD numbers, but said he still thinks the Wii brand is strong. Last week, Japan-based Nintendo reported a 42 percent fall in quarterly operating profit and forecast a bigger-than-expected profit decline this year.

Nintendo of America President Reggie Fils-Aime said in an interview he expects sales of the Wii to pick up as the company roles high-profile software titles later this month and in July.

"The pacing of our business will be different in 2009 versus 2008 .... Really for us this is all pacing versus any indication that the consumer is somehow changing their minds or their trends."

April's NPD data marked the second straight month in which video game sales fell 17 percent. The sector was thought by analysts to be relatively resilient in the economic downturn.

"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.

Fils-Aime said people are still willing to spend money on video games, pointing to the performance of its new DSi handheld console as proof.

The DSi, which was released in the United States on April 5, sold roughly 800,000 units in the month, far outpacing Sony's PSP handheld. The DS franchise as a whole sold more than a million units in the month, NPD said.

Nintendo also had the top-four best-selling software titles in the month, lead by "Wii Fit," which sold 471,000 units. "Pokemon Platinum" for the DS was No. 2, followed by "Mario Kart" and "Wii Play."

(Reporting by Gabriel Madway; Editing by Richard Chang)