Video-Game Consoles Weather Economic Storm (NewsFactor)

The economy may be slowing, but the video-game industry seems to be wearing its bulletproof vest -- with the notable exception of Sony.

According to the NPD Group, sales of U.S. video games and hardware rose 18 percent from the year-ago period. Specifically, hardware sales were up five percent to $494.7 million.

"In the U.S., third-quarter total industry unit sales grew eight percent versus 2007, even as the economy showed accelerating signs of recession," said Anita Frazier, an NPD analyst.

"As would be expected at this point in the console life cycle, games sales are starting to take the spotlight even as the average retail prices of games increased slightly," she continued. "Heading into the critical fourth quarter, the U.S. game industry is on solid ground."

Nintendo Leads the Charge

In down markets, video-game consoles tend to maintain their sales strength, largely because gaming consoles are perceived as high-value purchases, according to Michael Gartenberg, vice president of mobile strategy for Jupitermedia.

"When there is a downturn in the economy, often that's when consumers spend their money on in-home entertainment," Gartenberg said. "It's for the same reason that game consoles sell well in lower-income households."

Nintendo led the way once again with its Wii console. Nintendo sold 803,000 Wii units in October, up from 687,000 in September. In all, Nintendo has sold more than 13 million units since it debuted in November 2006 -- and might have sold more if it hadn't seen widespread shortages of the console.

"With the Wii, the perception is that this console is not only going to be valued by the gamer in the family, but it's going to have appeal to lots of family members beyond the hard-core gamers," Gartenberg said. "That helps drive adoption."

Clash of the Consoles

Microsoft's Xbox 360 game console sold 371,000 units in October, just above September's figures. But Sony's PlayStation 3 sold 190,000 units, down 18 percent from September sales.

October saw the release of hard-core gaming favorites such as Fable II, a fantasy title from Microsoft that plays exclusively on the Xbox 360. The game ranked first in October sales with 790,000 units. Fallout 3 was also a top seller. Bethesda Softworks sold 375,000 units of the Xbox 360 version in the United States in October, and 4.7 million worldwide across all platforms during its first week on the market.

Saints Row 2, THQ's urban-shooter series, sold about 270,000 units for the Xbox 360, and Electronic Arts' space horror title Dead Space sold 193,000 units for the Xbox 360 in October. Notably absent from the top list was the latest version of the smash musical hit Guitar Hero from Activision Blizzard. Nintendo's Wii Fit was the top-selling title for its platform.

"When people go into cocoon mode, they begin looking at entertainment solutions that don't mean leaving the house, so they don't have to get a babysitter and spend money on gas," Gartenberg said. "It becomes more about in-home entertainment solutions -- and video games have this perception of long-term value. You can play that game and get a lot of entertainment value for your dollar relative to other forms of entertainment."

Taken from here