The third quarter of 2009 was a pretty horrendous one for the video game industry. Year over year sales plummeted amid a lack of ‘must have’ games. Now, as earnings season draws near, game makers are about to face the consequences.

The November 2005 launch of the Xbox 360 marked not only the beginning of a new cycle of video game hardware, it also launched a new era in video game pricing.

Sony and Nintendo may tell anybody who will listen that they’re not planning to drop console prices this year, but judging by the results from each company’s first fiscal quarter, neither video game console maker may have a choice.

Squeezed by the economic downturn, U.S. retail sales of video games dropped sharply in June, the largest year-over-year decline the industry has seen in nearly nine years.

Sales of new video game software are down 7 percent compared to 2008, according to the NPD Group. But a new study by Nielsen finds that used game sales are at an all time high.

We’re nearly at the halfway point of 2009, so it seems a good time to take a look at what’s driving sales in the video game industry. On the whole, this year hasn’t been overly kind so far. Software sales are down 6 percent compared to this point in 2008 – a $200 million shortfall. And while there have been a few solid hits, several of the year’s best selling games are over a year old.