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U.S. retail game sales suffer continuing decline in March

Video game sales at U.S. retail suffered a 26 percent year over year decline in March, falling in line with analyst expectations and continuing the industry's trend of slipping retail sales.
Video game software revenues at retailers in the U.S. dropped 26 percent to $585.1 million in March, which falls in line with analyst expectations, but continues the industry's consistent declines over the past several months. Hardware proved to be the biggest detrimental factor in an overall $1.1 billion industry-wide decline, with $323.5 million in hardware revenue representing a 35 percent decline from March 2011, according to data from the NPD Group. "Hardware really slowed down this month and all systems saw a unit sales decline versus last March, and on an average sales per week basis, versus February 2012," said NPD analyst Anita Frazier. "That said, the high definition console systems fared better than many other hardware platforms." The top selling console for the month was Microsoft's Xbox 360, which Microsoft says sold 371,000 units. Of the three current home consoles, the Xbox 360 has been the number-one seller for 15 consecutive months. March also marked the PlayStation Vita's first full month on U.S. shelves, though Sony did not disclose any solid figures regarding the platform's performance. Much like hardware, video game software also saw a notable decline, and fell 26 percent year over year to $585.1 million, which -- unlike prior months -- matches analyst expectations. This marks the fourth consecutive month software sales have suffered a decline. When discussing these slow sales, PiperJaffray analyst Michael Olson said the industry could be facing declining sales of the Call of Duty franchise, and Wedbush Securities' Michael Pachter blamed the limited roster of big releases. The top ten best-selling games at retail for the month were as follows: 1. Mass Effect 3 (360, PS3, PC) 2. Resident Evil: Operation Raccoon City (360, PS3) 3. MLB 12: The Show (PS3, PSV) 4. NBA 2K12 (360, PS3, Wii, PSP, PC, PS2) 5. SSX (360, PS3) 6. Street Fighter X Tekken (PS3, 360) 7. Mario Party 9 (Wii) 8. Call of Duty: Modern Warfare 3 (360, PS3, Wii, PC) 9. Naruto Shippuden: Ultimate Ninja Storm Generations (360, PS3) 10. Major League Baseball 2K12 (360, PS3, Wii, NDS, PSP, PC, PS2) The top-selling game for the month also happened to be the most prominent high-profile release: Electronic Arts and BioWare's Mass Effect 3. Frazier said, "Mass Effect 3 sold more than twice as much as did Mass Effect 2 during its introductory month in January 2010." Capcom's multiplayer-focused Resident Evil: Raccoon City took the second spot on the list, and the publisher's cross-franchise fighter Street Fighter X Tekken also made the chart at number six. Other notable titles in the top 10 included MLB 12: The Show, NBA 2K12, and SSX. "In a list of the top 10 SKUs for the month (as opposed to top titles as listed here), [Nintendo's 3DS title] Kid Icarus: Uprising would have been among the top selling individual SKUs for the month of March," Frazier added. Activision's Skylanders products have also continued to see healthy sales. The game itself was the 15th best selling title of the month, and Frazier said, "The three character pack SKUs were all among the top 10 accessory items for the month of March." Analysts previously shared their thoughts on the months ahead, and Wedbush Securities, Sterne Agee, and Cowen and Co. all agreed that software sales should pick up in May thanks to major sequels like Rockstar's Max Payne 3 and Blizzard's Diablo III.

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