NPD:Videogame Industry Retail Sales For August Lowest Since `06

Monthly retail sales of new video games, consoles and accessories for the month of August fell to their lowest levels since 2006, reflecting a continuing slowdown in consumer spending.

U.S. sales throughout the video game industry for the month fell to about $1.6 billion, a drop of more than 10% from roughly $1.8 billion in the same month a year earlier, according to market research firm NPD Group. Analyst Anita Frazier said the slowdown particularly hit portable game and accessory makers, pushing sales down 25% from the previous year.

The Microsoft Corp. (MSFT) Xbox 360 was the top-selling game console for the month, while sales of the Nintendo Co. (NTDOY, 7974.OK) Wii were the lowest since its launch four years ago.

Blockbuster releases of new action games coupled with the expected release of new motion-based controls from Sony Corp.'s (SNE, 6758.TO) and Microsoft, should push sales to between $18.6 billion and $20 billion for the year, she said.

The debut of Electronic Arts Inc.'s (ERTS) "Madden NFL '11" helped push it to the top spot this month, NPD data showed, with sales about 6% higher than the franchise's debut month last year.

But that wasn't enough to prop up broadly weak sales. In August, the Top 10 games sold 3.3 million units, down from 4.1 million a year earlier.

Activision-Blizzard Inc.'s (ATVI) "Starcraft II: Wings of Liberty" for personal computers would have been the second-best selling game of the month, Frazier said, but NPD doesn't include PC game sales in its monthly video game reports.

Additionally, NPD only tracks the performance of brick-and-mortar retail sales. Some analysts say that suggests NPD's data might miss the industry's overall performance.

"We believe strong PC sales (from StarCraft II and World of Warcraft Cataclysm) should offset stagnant console sales and declining handheld sales," Wedbush Securities analyst Michael Pachter said in a note to investors. There were much stronger new titles on the market last year at this time, he added, making yearly comparisons that much more dramatic.

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

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