Sales of Video Games, Systems Plunged in April

April was not a good month for the video game industry.

Game software sales came in at just over $1 billion, a 23 percent drop compared with the 2008 numbers, according to market research firm NPD Group. The 2008 numbers were bolstered by blockbuster titles "Grand Theft Auto IV" and "Mario Kart Wii"—and a stronger economic climate.

The drop was larger than expected. Analysts had forecast a 20 percent decline, citing the light game release schedule by publishers this April.

Hardware sales were down 8 percent, with the Nintendo Wii showing the first signs that its phenomenal run at retail could be coming to an end.

Nintendo sold 340,000 Wii units in April. However, that was a marked month-over-month decline, indicating demand for the system has settled. (The company sold 753,000 Wiis in February and 601,000 in March.)

Despite the slowdown, the Wii continues to dominate its competition. Microsoft sold just 175,000 Xbox 360s in April, while Sony sold 127,000 PlayStation 3s.

Year to date, total dollar sales in the video game industry are now at $5.28 billion—4 percent below the 2008 numbers. Even hardware sales, which—buoyed by the Wii—have been supporting the industry, are now behind last year’s pace.

The video game industry has typically performed better than other retail sectors in a rough economy, but the last two months have shown it to be far from recession proof.

Expected price cuts to the PlayStation 3 could give the industry a needed boost. The momentum decline by Nintendo could prompt calls for a price cut on the Wii, as well. That’s a long shot, since the system is still outselling its both of its competitors combined.

Year to date, there have been 2.31 million Wiis sold. The Xbox 360 has sold 1.21 million units, while the PS3 has racked up sales of 824,000 units.

Nintendo did have a solid victory with its handheld system, though, selling over 1 million Nintendo DS units. The redesigned DSi, which launched in early April, seems to have resonated with consumers. DS sales were more than double the 2008 numbers.

Sony, meanwhile, saw the benefits of its recent price drop on the PlayStation 2. Sales of the system, now in its 10th year, were up 39 percent year over year—and climbed 54 percent over the March 2009 numbers.

"This is a testament to the impact a price reduction can have on hardware acquisition, with price being only second to compelling new content as a catalyst for hardware sales," said NPD analyst Anita Frazier.

On the software side, Nintendo published six of the ten top selling games, with the popular "Wii Fit" topping the charts, selling 471,000 copies. Electronic Arts was the highest-ranking third-party publisher, with "The Godfather II" selling 246,000 copies (155,000 for the Xbox 360 and 91,000 for the PS3).

To illustrate the strength of April 2008’s software releases, Take Two Interactive Software’s "GTA IV" sold nearly 2.9 million copies last year, while "Mario Kart Wii" sold 1.1 million.