NPD: January game sales slip 6 percent, Wii and PS3 neck-and-neck

Overall decline overshadows complex combination of rising software and falling hardware sales during shorter reporting period; Sony's console passes Xbox 360 for first time to nearly tie Nintendo's machine in sales.

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The US gaming industry ended 2007 with record retail sales of nearly $18 billion. This week, though, the NPD Group provided a sobering reminder that market growth is not guaranteed.

Today, the industry-research firm released its US retail sales data for its January 2008 reporting period. While software sales for the month were up 11 percent to nearly $611 million for the month, hardware sales fell by a quarter to about $378 million. Combined with modestly declining accessory sales, the overall industry was down 6 percent for the month, posting $1.18 billion compared to January 2007's $1.25 billion take.

Despite that, the month contained indications that the industry actually grew. That's because NPD's January 2007 reporting period was actually five weeks long as opposed to this January's four-week span. NPD analyst Anita Frazier noted that the numbers are much rosier when that adjustment is taken into account.

"At the top-line, on an average sales per week basis, January 2007 was actually up nearly 18 percent as compared to last year," Frazier said. "And the big winner was console software which was up nearly 50 percent when compared on a level playing field to last year."

However, even on a week-by-week basis, hardware sales were still down 6 percent from last year. Frazier blamed that slide on price cuts made to the consoles, and speculated that hardware shortages in the wake of stellar December sales contributed to January's slide. That assertion was backed up a statement from Microsoft saying the Xbox 360 was suffering from temporary shortages.

Hardware sales weren't the only thing shrinking last month, and Nintendo's longtime lead on its competitors was similarly slimmed. The Wii once again took the system sales crown, but by a much narrower margin than in previous months--and with a new challenger nipping at its heels. In a month that saw significant advances for the PlayStation 3's chosen Blu-ray disc format, Sony's system ran nearly neck-and-neck with the Wii, selling 269,000 systems compared to the Nintendo console's 275,000. The third-place Nintendo DS racked up 251,000 system sales, while the PlayStation Portable and Xbox 360 brought up the rear, selling 230,000 units each.

As is customary after the holiday rush, January was a light month for game releases. Only two new titles cracked the top 10 software sales, with the Xbox 360 version of Burnout Paradise coming in seventh place with more than 144,000 sold, while the DS debut of Mario and Sonic at the Olympic Games rounded out the 10 spot with 133,000 copies sold.

More familiar faces dominated the software list, with Call of Duty 4: Modern Warfare for the Xbox 360 once again besting all challengers, notching up another 331,000 in sales. The PS3 edition also did well, taking eighth place overall. Nintendo's Wii Play completed a full lap of the calendar, as the February 2007 release was second with just over 298,000 in sales. Guitar Hero on the Wii and Xbox 360 took third and fifth respectively, sandwiching the Xbox 360 version of competitor Rock Band at number four. The remaining spots were claimed by Super Mario Galaxy for the Wii at six and the DS edition of Mario Party in ninth.

THE NPD GROUP's JANUARY 2008 US GAME INDUSTRY SALES

Category / Total / Change
Video Games: $1.18 billion -6%
Video Games Hardware: $378 million -25%
Video Games Software: $550 million +11%
Video Game Accessories: $191 million -4%
Total Sales Per Week: $295 million +18%

Hardware Sales (in units sold)
Wii: 274,000
PlayStation 3: 269,000
Nintendo DS: 251,000
PlayStation Portable: 230,000
Xbox 360: 230,000

Game Software (in units sold)
1) Call of Duty 4: Modern Combat (360, Activision) - 331,000
2) Wii Play with Wii Remote (Wii, Nintendo) - 298,000
3) Guitar Hero III: Legends of Rock (Wii, Activision) - 240,000
4) Rock Band (Xbox 360, MTV Games) - 184,000
5) Guitar Hero III: Legends of Rock (Xbox 360, Activision) - 183,000
6) Super Mario Galaxy (Wii, Nintendo) - 172,000
7) Burnout Paradise (Xbox 360, EA) - 144,000
8) Call of Duty 4: Modern Combat (PS3, Activision) - 140,000
9) Mario Party DS (DS, Nintendo) - 139,000
10) Mario and Sonic at the Olympic Games (DS, Sega) - 133,000

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