Video Game Sales Drop 25 Percent In Month Of May

Microsoft Debuts Xbox One

Take a look at the next generation Xbox - the Xbox One - to go on sale later this year as an all in one entertainment console.

Microsoft and Sony made a big splash last week as they unveiled new video game consoles like Xbox One and PlayStation 4.

But news for the gaming industry was dimmer this week.

Market research firm NPD said the industry saw an over $100 million decline in sales in the U.S. in the month of May – a 25 percent decrease as demand for aging game consoles continued to fade and fewer new games launched compared with last year.

NPD said late Monday that total video game sales were $386.3 million, down from $517 million in May 2012. The decline comes as Microsoft Corp. and Sony Corp. are getting ready to launch new consoles later this year. The Xbox One, the successor to Microsoft's Xbox 360, and the PlayStation 4, successor to Sony's PS3, are expected to boost game sales over the holiday season.

Hardware sales dropped 31 percent year-over-year to $96 million from $139 million. Software sales also fell 31 percent to $175.1 million from $255.4 million. The month's best-selling game was "Injustice: Gods Among Us," from Warner Bros. Interactive, followed by "Call of Duty: Black Ops II" from Activision Blizzard Inc. Nintendo's "Donkey Kong Country Returns" came in at No. 3.

Sales of gaming accessories slid 6 percent to $115.3 million from $122.5 million.

NPD estimates that sales of new video game discs, hardware and accessories account for about half of what people spend on games.

Cowen and Co. analyst Doug Creutz expects the year-over-year declines to continue in June and July, but after that expects several consecutive months of increases, with the launch of the next "Madden" game from EA, the launch of "Grand Theft Auto V" from Take-Two Interactive Software Inc. in September and other blockbuster game releases.

"In general, we believe the fact that (the new) consoles appear poised for a good launch is far more important than current NPD trends," Creutz wrote in a note to investors.

Activision's shares were unchanged at $14.73 in morning trading. Shares of GameStop Corp., the world's largest video game retailer, slid 20 cents to $38.30. Microsoft's stock rose 3 cents to $35.03. Shares of Electronic Arts Inc. rose 27 cents to $22.70.

Based on reporting by The Associated Press.

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