US Video Game Sales Slightly Off In July

U.S. video game industry sales fell less than 1% in July, driven by sales of new video game consoles and the long-anticipated PC game, "Starcraft II."

Software sales took the biggest hit, dropping 8%, but total sales of videogame hardware, software and accessories for the month fell to just over $1.69 billion from $1.7 billion the previous year, according to market research firm NPD Group.

Analyst Anita Frazier said PC game sales more than doubled from last year as a result of the Activision Blizzard Inc. (ATVI) sequel to one of the most successful games of all-time, "Starcraft." Overall game sales were bolstered by Electronic Arts Inc.'s (ERTS) "NCAA Football 11," which sold nearly 700,000 units.

Additionally, the new "slim" form factor Xbox 360 pushed console hardware sales for the month and made Microsoft Corp.'s (MSFT) gaming device the top-selling hardware platform for the first time in nearly three years.

That could represent new momentum leading into the holiday season, analysts say, with Microsoft's Kinect, Sony Corp.'s (SNE, 6758.TO) Move Controller, and Nintendo Co.'s (NTDOY, 7974.OK) 3DS poised to drive even further sales.

"Each device is quite interesting, and we expect the three combined to meaningfully impact the market," Wedbush Securities analyst Michael Pachter said in a note to investors.

Pachter also noted the continued rising importance of multiplayer videogames. Popular titles such as Activision's "Call of Duty: Modern Warfare 2" and "Starcraft 2" both have strong multiplayer and online components, which tap into the potentially lucrative Internet market.

Points and subscription cards were also the top-selling accessory type for the month, NPD's Frazier noted.

"The general success of the Points and Subscriptions cards category within Accessories points to the activity that is happening in the industry outside the traditional retail channel," she said.

-By Ian Sherr, Dow Jones Newswires; 415-439-6455; ian.sherr@dowjones.com

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