More Downloads, Fewer Discs: U.S. Video Game Sales Remain Flat

U.S. video-game sales remained flat in 2010 as the growing popularity of downloadable and social-network games offset the slowing sales of physical video game discs, according to an NPD Group report released Thursday. Activision Blizzard's (ATVI) record-breaking "Call of Duty: Black Ops" also propped up software sales late in the year, while hardware sales plunged on a lack of new products, the group says.

All together, Americans last year spent about $15.5 billion on new and used packaged games, digital downloads, social games and mobile game applications, according to the report. New packaged game sales fell 5% from 2009 to $10.1 billion, in spite of the newest "Call of Duty" title, which surpassed $1 billion in global sales in just seven weeks after its Nov. 9 release. (The only other entertainment title to reach the $1 billion mark within the same timeframe was the late-2009 Fox film release of "Avatar," which has grossed almost $2.8 billion in global box-office receipts, according to BoxOfficeMojo.com.)

Instead, more gamers downloaded games and played social-network games. "The dynamics of games-content purchasing changed dramatically in 2010 with options ranging from the physical product to digital downloads on connected devices as well as in-store digital kiosks," NPD Group industry analyst Anita Frazier said in a statement.

Still, combined U.S. video-game hardware and software sales fell 6% from 2009 because of dismal hardware sales that plunged 13% to $6.29 billion. Americans spent $18.6 billion on videogame hardware and software last year, down from $19.7 billion a year earlier.

Among game-disc sales, "Call of Duty" was 2010's best-selling title despite its late-year release. Electronic Arts' (ERTS) "Madden NFL 11" was the second-best-selling title, while Microsoft's (MSFT) "Halo: Reach," Nintendo's "New Super Mario Bros. Wii" and Take Two Interactive Software's (TTWO) "Red Dead Redemption" rounded out the top five of the year, according to NPD Group.

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