February game sales continue slide

Hardware sales are up thanks to handhelds; software trails already tempered expectations.

Another monthly report from data trackers NPD, another round of disappointing numbers.

According to NPD stats, US video game-software sales for February amounted to more than $340 million, a 13 percent drop from February 2005. That marks the sixth straight month that has seen declining year-on-year software sales. However, the news wasn't all bad. While software sales were down, the hardware market was strong, jumping 22 percent from the previous February, to more than $200 million in sales.

NPD's entertainment-industry analyst Anita Frazier cautioned that the numbers on software aren't as bad as they look, nor are the hardware numbers enough to drive the software numbers up sufficiently enough.

"The month was down 5 percent [hardware and software combined] as compared with February '05," Frazier noted, "but you have to remember that Q1 was especially strong last year, with GTA: San Andreas and Halo 2 still selling strong...While hardware sales are up considerably, severe inventory constraints of the Xbox 360 at retail limit the upside potential that could offset software sales and provide the larger install base for software sales."

Year to date, the hardware sector is up 31 percent over last year. February sales were driven by portables, according to Frazier, who said, "Portables drove the market last year and will continue to buoy the industry, at least until supply constraints of the 360 ease up and more details are revealed about the market introduction of the PlayStation 3 and the Revolution."

For the time being, according to Frazier, the industry will have to endure the reality of slowed consumer spending. "Until then, we'll continue to see consumers holding their dollars in anticipation of a future hardware purchase," Frazier said.

According to industry sources, more than 160,000 Xbox 360s were sold in February. That compares to more than 300,000 PlayStation 2's, more than 170,000 PlayStation Portables, and over 150,000 Nintendo DS units sold during the month of February.

The month's top sellers, in order, were Madden NFL '06 for the PlayStation 2, Fight Night Round 3 for the Xbox 360, Fight Night Round 3 for the PS2, Call of Duty 2 for the Xbox 360, and Animal Crossing: Wild World for the Nintendo DS.

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