Video game sales defy economic slowdown

— -- Perhaps shoppers needed the diversion from October's economic woes. Whatever the reason, the financial downturn did not keep shoppers from indulging in their video game avocation, according to researcher NPD Group's monthly sales report .

Overall, sales of console game systems, software and accessories rose 26% compared to October 2007. Portable game sales dropped for the one month period, but total sales for the year are 7% ahead of 2007." The video games industry grew an impressive 18% year-over-year in the first month of the critical fourth quarter," says NPD analyst Anita Frazier. "With ten months under its belt, the video games industry is still poised to top $22 billion in annual sales in 2008" — which would set another annual sales record.

Nintendo's sought-after Wii system had its biggest sales month (selling 803,000) since December 2007, Frazier said. "The greater supply of Wii hardware at retail is evident in the sales figures," she says.

October's sales brought the Wii's total sales since launching nearly two years ago to about 13.4 million. The competing systems, the Xbox 360 and PlayStation 3, had higher sales than in October 2007. Consumers bought 371,000 Xbox 360s, driving its total sales to 12.1 million. "The price reduction on the Xbox 360 (to $199 for an entry-level system) is paying dividends at retail," Frazier says. PS3 sales of 190,000 brought its total sales to 5.7 million. "The PS3 realized the greatest year-over-year monthly unit sales increase at 57%," Frazier says.

Fable II, the role-playing game from Peter Molyneux's Lionhead Studios (The Movies, Black & White), was the top-selling video game of the month with a solid 790,000 copies sold.

Nintendo's Wii Fit continued to be in high demand as the No. 2 seller at 487,000, driving its total sales to nearly 2.8 million. "Fun and fitness works," says Nintendo's Cammie Dunaway. "The Wii Fit is moving extrememly rapidly. It is going to be one of those hot holiday items."

The remaining best sellers: at No. 3, the Xbox 360 version of Fallout 3 (375,000 with less than a week in stores); No. 4, Mario Kart Wii (289,869); and at No. 5, Wii Play (281,844).

How the sales game plays out the rest of 2008 remains to be seen, says industry analyst Michael Pachter of Wedbush Morgan Securities. "In October, there were a ton of great games, and hard core users showed up, even though consumer sentiment was at an all-time low," he says. "In November and December, half of purchases are by gift-givers, so we'll see how the recession impacts them. I'm betting that video game sales will see their growth trajectory trimmed by 5% … for the next two months."

The rest of October's top selling games: Saints Row 2 (Xbox 360) 270000; SOCOM: U.S. Navy Seals: Confrontation (PS3) 231,000; LittleBigPlanet (PS3) 215,000; NBA 2K9 (Xbox 360) 202,000; Dead Space (Xbox 360) 193,000.