U.S. video game sales rise 9% in August

NEW YORK -- U.S. sales of video game hardware and software rose 9% in August to $994.8 million, boosted by the popularity of the newly released Madden NFL 09.

Americans bought $384.6 million in video game hardware, up 3% from a year ago, lead by sales of the handheld Nintendo DS, which sold 518,300 units, according to data from market researcher NPD Group.

Nintendo's Wii was the second-best seller with 453,000 units, while Microsoft Corp.'s Xbox 360 rounded up the top three, selling 195,200 units. Sony's PlayStation 3 sold 185,400 units.

In an attempt to better compete with rival consoles, Microsoft Corp. cut the price of the Xbox 360 last Friday, making the least expensive version cheaper than the Wii. Without giving specific numbers, the company said this week that sales of the console have "surged" since then, with "retailers reporting over 100% sales lift for all Xbox 360 models compared to the previous weekend."

The Xbox 360 Arcade version costs $200, down from $280 and below the Wii's price of $250. Sony's 80-gigabyte PlayStation 3, which includes a Blu-ray player, sells for $400.

Software sales rose 13% to $489.1 million. That fell short of the 23% rise to $600 million Wedbush Morgan analyst Michael Pachter had expected.

Aside from Electronic Arts' Madden NFL 09, top sellers included Nintendo's Wii Fit and Mario Kart.

Even amid the economic downturn, the video game industry has been faring well. This is in part because games cost about the same as they did a couple of decades ago, even as the prices of other consumer goods have increased sharply. In 1993, for example, Nintendo charged $60 for a game cartridge for its Super Nintendo Entertainment System — today its Mario Kart Wii is available for $50.

The industry also tends to operate outside the ups and downs of the broader economy. With new gaming consoles launched every few years, gamers flock to buy them, along with the subsequent video games.

NPD analyst Anita Frazier said the increase in overall video game hardware and software was strong but was the first single-digit percentage growth in 27 months.

"Despite smaller growth this month, the industry is up 32% year-to-date and remains on target to achieve annual revenues in the range of $22 billion to $24 billion," Frazier said in a statement.